The Estate Tax and the Demise of the Family Business: A Comment

11 Pages Posted: 3 Dec 2008 Last revised: 5 Feb 2009

See all articles by David Joulfaian

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

Date Written: January 1, 2009

Abstract

A recent paper by Brunetti (2006) examines whether the US estate tax forces heirs with insufficient liquid assets to sell inherited businesses in order to pay the estate tax. It concludes that the estate tax has a positive effect on such sales. This note highlights features of the estate tax and succession planning by entrepreneurs that have been overlooked which could explain the observed pattern of business sales. These omissions, along with measurement errors, cast doubt on the reported findings.

Keywords: Estate tax, Family business, Succession Planning

JEL Classification: H21, H24, H25

Suggested Citation

Joulfaian, David, The Estate Tax and the Demise of the Family Business: A Comment (January 1, 2009). Available at SSRN: https://ssrn.com/abstract=1309856 or http://dx.doi.org/10.2139/ssrn.1309856

David Joulfaian (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States

Georgetown University - Department of Economics ( email )

37th St NW & O St NW
Washington, DC 20007
United States

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