Dying to Save Taxes: Evidence from Estate-Tax Returns on the Death Elasticity

Abstract

Abstract-This paper examines data from U.S. federal tax returns to shed light on whether the timing of death is responsive to its tax consequences. We investigate the temporal pattern of deaths around the time of changes in the estate-tax system periods when living longer, or dying sooner, could significanlly affect estate-tax liability. We find some evidence that there is a small death elasticity, although we cannot rule out that what we have uncovered is ex post doctoring of the reported date of death.

Did the Death of Australian Inheritance Taxes Affect Deaths?

“…The seminal study of the responsiveness of death rates to inheritance tax changes is Kopczuk and Slemrod (2003), who analyse a series of changes to the US estate tax. Their results are not consistent across all tax changes, but overall, they find a small positive death elasticity.…”

Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy

“…Slemrod and Kopczuk (2003) investigate the temporal pattern of deaths around the time of changes in the estate tax system and uncover some evidence that there is a small death elasticity.…”