Do Transfer Taxes Reduce Intergenerational Transfers?

Jappelli, Tullio; Padula, Mario; Pica, Giovanni

doi:10.1111/jeea.12044

Cited by 19 publications

(18 citation statements)

References 36 publications

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“…These rates refer to the case of a grantee who is either a spouse or a direct relative of the deceased or the donor. Rates for all other individuals are higher, see Jappelli et al (2014) for more details.…”

Section: Introductionmentioning

confidence: 96%

Intergenerational altruism and house prices: Evidence from bequest tax reforms in Italy

Bellettini

Taddei

Zanella

2017

European Economic Review

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The degree of intergenerational altruism is estimated in a benchmark Barro-type OLG framework with imperfect altruism, exploiting the exogenous variation generated by reforms of the tax treatment of bequests and inter vivos real estate donations enacted in Italy between 2000 and 2001. Using longitudinal information on the housing stock and house prices in 13 large Italian cities between 1993 and 2004, the structural parameter of interest is estimated via the effect of the reform on house prices. We estimate a degree of intergenerational altruism ranging between 0.2 and 0.3, a magnitude consistent with existing parametrization for the US economy. This suggests that intergenerational altruism may be similar across advanced economies.

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Section: Introductionmentioning

confidence: 96%

Intergenerational altruism and house prices: Evidence from bequest tax reforms in Italy

Bellettini

Taddei

Zanella

2017

European Economic Review

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“…More recently, two contributions made further progress in overcoming the identification issues [Jappelli et al 2014;Goupille and Infante 2014]. In contrast to this paper, both studies focused on the responsiveness of specific assets of the estate instead of on inheritances.…”

Section: Introductionmentioning

confidence: 99%

Behavioral Responses to Wealth Transfer Taxation: Bunching Evidence from Germany

Glogowsky

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractIncreasing inequality in recent decades has triggered a heated debate on whether wealth transfer taxation is an appropriate countermeasure to the perpetuation of inequality. A major factor in making progress in this discussion is understanding how taxpayers respond to incentives generated by wealth transfer taxes. Using administrative tax records from Germany, this paper investigates behavioral responses to a very large transfer tax kink in the inheritance and inter vivos gift tax schedule. We find sharp bunching of taxable inheritances and even larger bunching of taxable inter vivos gifts. However, because the kink is large, the underlying taxable inheritance and gift elasticities are moderate and amount up to 0.11. In line with the notion of accidental bequest models, further evidence suggests that the amount of wealth bequeathed is uncertain.This may explain the small size of the inheritance elasticities. Based on the results, the present paper lends strong support to the hypothesis that wealth transfers are relatively inelastic along the intensive margin in the short term.JEL codes: H21, H24, H26, H31

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“…From Equation (4), one obtains 9 For simplicity, we abstract from the fact that in some countries (notably Germany), the child may be called upon to contribute to the cost of LTC, resulting in a deduction from 0 z that depends on 0 z (means testing) and p. Also, the model is in terms of one parent and one child; otherwise, the optimal allocation of both bequest and caring effort between the surviving spouse and the children would have to be determined.…”

Section: mentioning

confidence: 99%

“…9 Here, t symbolizes the rate of the tax levied on inheritance. During the first period, the child is assumed to value his or her effort with an opportunity cost θ per unit of time (the wage rate if employed).…”

Section: The Childmentioning

confidence: 99%

“…2 This paper abstracts from private LTC insurance on the grounds that the market for it is very small, especially in countries that have implemented public LTC insurance. 3 Empirical evidence suggests a negative correlation between inheritance taxation and intergenerational transfers (see e.g., [9]). retirement, reacting to the child's effort which serves to reduce the probability of admission to a nursing home.…”

Section: Introductionmentioning

confidence: 99%

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Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care

Courbage

Zweifel²

2015

Risks

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Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private saving or informal care. This contribution predicts crowding-out effects for both private saving and informal care for policy measures designed to relieve the public purse from LTC expenditure such as more stringent means testing and increased taxation of inheritance. These effects result from the interaction of a parent who decides on the amount of saving in retirement and a caregiver who decides on the effort devoted to informal care which lowers the probability of admission to a nursing home. Double crowding-out effects are also found to be the consequence of exogenous influences, notably a higher opportunity cost of caregiving.

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Do Transfer Taxes Reduce Intergenerational Transfers?

Cited by 19 publications

References 36 publications

Intergenerational altruism and house prices: Evidence from bequest tax reforms in Italy

Intergenerational altruism and house prices: Evidence from bequest tax reforms in Italy

Behavioral Responses to Wealth Transfer Taxation: Bunching Evidence from Germany

Double Crowding-Out Effects of Means-Tested Public Provision for Long-Term Care

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