Intergenerational Disagreement and Optimal Taxation of Parental Transfers

Hakki Yazici () and Nicola Pavoni

No 250, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: We study optimal taxation of bequests and inter vivos transfers in a model where altruistic parents and their offspring disagree on intertemporal trade-offs. We show that laissez-faire equilibrium is Pareto inefficient, and whenever offspring are impatient from their parents' perspective, optimal policy involves a positive tax on parental transfers. Cautioned by the technical complications present in this class of models, our normative prescriptions do not rely on the assumption of differentiability of the agents’ policy functions.

Date: 2015
New Economics Papers: this item is included in nep-dge and nep-pbe
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Journal Article: Intergenerational Disagreement and Optimal Taxation of Parental Transfers (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:250

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