The Behavioral Response of Wealth Accumulation to Estate Taxation: Time Series Evidence

27 Pages Posted: 22 May 2006

See all articles by David Joulfaian

David Joulfaian

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

Abstract

This paper explores the behavioral response of taxable bequests to estate taxation. To gauge its effects, the estate tax is converted to an equivalent income tax. This highlights the importance of expected rates of return, and also makes it possible to compare effective tax rates on saving over time. Using data on federal revenues from the estate tax over the past 50 years, and employing the equivalent income tax rate measure, the findings suggest that estate taxes have a dampening effect on the reported size of taxable estates. Estate taxation seems to depress taxable bequests by almost 10 percent.

Keywords: Saving, Bequests, Estate Tax

JEL Classification: D19, H31

Suggested Citation

Joulfaian, David, The Behavioral Response of Wealth Accumulation to Estate Taxation: Time Series Evidence. National Tax Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=903448

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

Register to save articles to
your library

Register

Paper statistics

Downloads
168
Abstract Views
1,344
rank
180,869
PlumX Metrics