Behavioral Responses to Inheritance and Gift Taxation: Bunching Evidence from Germany

84 Pages Posted: 6 Feb 2018 Last revised: 9 Sep 2020

See all articles by Ulrich Glogowsky

Ulrich Glogowsky

Ludwig Maximilian University of Munich (LMU)

Date Written: September 7, 2020


The desirability of inheritance and gift taxes depends on individuals' tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a convex kink in the tax liability precedes a concave kink. Extending the bunching approach to such double-kinked tax schedules, I document that individuals tailor their taxable wealth transfers to the schedules. One type of response dominates for inheritances: testators engage in testament planning. The magnitude of the testament-planning response is comparable to that of inter vivos gifts. However, neither the overall responses of gifts nor those of inheritances heavily interfere with tax revenue collection: the associated short-run net-of-tax elasticities of taxable wealth transfers lie below 0.1.

Keywords: Behavioral Responses, Bunching at Kinks, Wealth Transfer Taxation, Inheritance Taxation, Estate Taxation, Accidental Bequest

JEL Classification: H21, H24, H26, H31

Suggested Citation

Glogowsky, Ulrich, Behavioral Responses to Inheritance and Gift Taxation: Bunching Evidence from Germany (September 7, 2020). Available at SSRN: or

Ulrich Glogowsky (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539

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