Accidental bequests: A curse for the rich and a boon for the poor

Arbeitspapier

When accidental bequests signal otherwise unobservable individual characteristics such as productivity and longevity, the tax administration should partition the population into two groups: One consisting of people who do not receive an inheritance and the other of those who do. The first tagged group gets a second-best tax à la Mirrlees; the second group a first-best tax schedule. The solution implies that receiving an inheritance makes high-ability types worse off and low-ability types better off. High-ability individuals will necessarily face a bequest tax of more than 100%, while low-ability types face a bequest tax that can be smaller as well as larger than 100% and may even be negative.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3094

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: accidental bequests ; estate tax ; tagging ; first best ; second best ; Grundsteuer ; Erbschaftsteuer ; Optimale Besteuerung ; Erbe ; Verteilungswirkung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cremer, Helmuth ; Gahvari, Firouz ; Pestieau, Pierre
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/38890
• Last update: 10.03.2025, 11:42 AM CET