Estate Taxes and Charitable Bequests: Evidence from Two Tax Regimes

OTA Working Paper No. 92

31 Pages Posted: 25 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

Date Written: March 2005

Abstract

Much of the literature on the effects of estate taxation on charitable bequests has relied on cross sectional data, reflecting the uniqueness of death. Few have explored longitudinal data to exploit exogenous variations in tax regimes. The latter, however, continue to be susceptible to omitted variable as well as measurement error biases attributable to changes in the treatment of spousal bequests and frequent changes in tax regimes. This paper explores the effects of the estate tax on charitable bequests using administrative data from two tax regimes where earlier biases are minimized. The deductibility of charitable bequests is found to have significant implications for giving. However, the effects of estate tax repeal are much smaller. These findings are sensitive to expectations of the tax regime in effect at time of death.

Keywords: Bequests, Taxes, Charitable Giving

JEL Classification: D19, H24, H31

Suggested Citation

Joulfaian, David, Estate Taxes and Charitable Bequests: Evidence from Two Tax Regimes (March 2005). Available at SSRN: https://ssrn.com/abstract=904107 or http://dx.doi.org/10.2139/ssrn.904107

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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