Abstract

https://ssrn.com/abstract=579792
 
 

References (55)



 
 

Citations (9)



 


 



Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns


Jon Bakija


Williams College - Department of Economics

Joel B. Slemrod


University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

July 2004

NBER Working Paper No. w10645

Abstract:     
This paper examines how changes in state tax policy affect the number of federal estate tax returns filed in each state, utilizing data on federal estate tax return filings by state and wealth class for 18 years between 1965 and 1998. Controlling for state- and wealth-class specific fixed effects, we find that high state inheritance and estate taxes and sales taxes have statistically significant, but modest, negative impacts on the number of federal estate tax returns filed in a state. High personal income tax and property tax burdens are also found to have negative effects, but these results are somewhat sensitive to alternative specifications. This evidence is consistent with the notion that wealthy elderly people change their real (or reported) state of residence to avoid high state taxes, although it could partly reflect other modes of tax avoidance as well. We discuss the implications for the debate over whether individual states should decouple' their estate taxes from federal law, which would retain the state tax even as the federal credit for such taxes is eliminated. Our results suggest that migration and other observationally equivalent avoidance activities in response to such a tax would cause revenue losses and deadweight losses, but that these would not be large relative to the revenue raised by the tax.

Number of Pages in PDF File: 66


Open PDF in Browser Download This Paper

Date posted: August 25, 2004  

Suggested Citation

Bakija, Jon and Slemrod, Joel B., Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns (July 2004). NBER Working Paper No. w10645. Available at SSRN: https://ssrn.com/abstract=579792

Contact Information

Jon Bakija
Williams College - Department of Economics ( email )
Morey House
Williamstown, MA 01267
United States
Joel B. Slemrod (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,694
Downloads: 78
Download Rank: 248,668
References:  55
Citations:  9