Estate Taxes and Charitable Bequests by the Wealthy

40 Pages Posted: 16 May 2000  

David Joulfaian

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

Date Written: April 2000

Abstract

Charitable bequests are an important source of philanthropic support. Unlike bequests to children which can be taxed at a maximum statutory rate of 0.55, such transfers are exempt from estate taxation. Thus, by lowering the price of charitable giving, the estate tax may influence the disposition of terminal wealth. In this paper, I examine the effects of estate taxation on charitable bequests using data from estate tax returns of decedents in 1992. The results suggest that the estate tax deduction is budget' efficient. The overall effects of the estate tax, however, are likely to be modest as charitable bequests are wealth elastic.

Suggested Citation

Joulfaian, David, Estate Taxes and Charitable Bequests by the Wealthy (April 2000). NBER Working Paper No. w7663. Available at SSRN: https://ssrn.com/abstract=228137

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

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