Estate Taxation with Both Accidental and Planned Bequests

24 Pages Posted: 6 Oct 2006

See all articles by Pierre Pestieau

Pierre Pestieau

University of Liège - Research Center on Public and Population Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Motohiro Sato

Hitotsubashi University - Faculty of Economics

Date Written: September 2006

Abstract

Actual inheritances are an hybrid of canonical types of bequests and in particular of accidental bequests and altruistic bequests. In this paper, bequeathed estate consists of two components: an amount intended by altruistic parents and an amount which results from the "premature" death of parents. Altruistic parents can also invest in their children's education. Taxing those two types of bequests separately is known to have different implications. The purpose of this paper is to see the distributive incidence of estate taxation when those two components are indistinguishable. The substitutability between education and intended bequests plays a key role in the tax design.

Keywords: estate taxation, inheritance, bequests motives

JEL Classification: H20, D64

Suggested Citation

Pestieau, Pierre and Sato, Motohiro, Estate Taxation with Both Accidental and Planned Bequests (September 2006). CESifo Working Paper Series No. 1799, Available at SSRN: https://ssrn.com/abstract=935018

Pierre Pestieau (Contact Author)

University of Liège - Research Center on Public and Population Economics ( email )

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Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute)

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Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

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Louvain la Neuve
Belgium

Motohiro Sato

Hitotsubashi University - Faculty of Economics ( email )

Tokyo, 186-8601
Japan

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