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Fair Inheritance Taxation in the Presence of Tax Planning

Matthias Wrede ()

Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes to what extent tax planning impacts on the level of the inheritance tax rate perceived as fair. In a factorial survey conducted in Germany it finds out that tax planning increases the fair tax rate by roughly 4 percentage points. The fair tax rate is not only determined by the size of the bequest, the relationship of the heir to the bequeather, and the type of bequest, but also by the perceived intentions of the bequeather. The families with social motives should be taxed less than those without. The paper looks for support in optimum-tax theory. To this end, it develops a simple model that shows that taxation should not prevent individuals with warm-glow-of-giving motives to contribute substantially more to the social good than individuals without these motives.

JEL-codes: H24 H21 D64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-pub
Date: 2013
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https://www.econstor.eu/bitstream/10419/79731/1/VfS_2013_pid_592.pdf (application/pdf)

Related works:
Journal Article: Fair inheritance taxation in the presence of tax planning (2014) Downloads
Working Paper: Fair inheritance taxation in the presence of tax planning (2013) Downloads
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