Premature Deaths, Accidental Bequests and Fairness

Arbeitspapier

While little agreement exists regarding the taxation of bequests in general, there is a widely held view that accidental bequests should be subject to a confiscatory tax. We propose to reexamine the optimal taxation of accidental bequests in an economy where individuals care about what they leave to their offspring in case of premature death. We show that, whereas the conventional 100 % tax view holds under the standard utilitarian social welfare criterion, it does not hold under the ex post egalitarian criterion, which assigns a strong weight to the welfare of unlucky short-lived individuals. From an egalitarian perspective, it is optimal not to tax, but to subsidize accidental bequests. We examine the robustness of those results in a dynamic OLG model of wealth accumulation, and show that, whereas the sign of the optimal tax on accidental bequests depends on the form of the joy of giving motive, it remains true that the 100 % tax view does not hold under the ex post egalitarian criterion.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6802

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Altruism; Philanthropy; Intergenerational Transfers ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Fiscal Policies and Behavior of Economic Agents: Household ; Demographic Economics: General
• Subject: mortality ; accidental bequests ; optimal taxation ; egalitarianism ; OLG models

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fleurbaey, Marc ; Leroux, Marie-Louise ; Pestieau, Pierre ; Ponthiere, Grégory ; Zuber, Stéphane
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/174925
• Last update: 10.03.2025, 11:41 AM CET