What if Estate Taxpayers Were Viewed as Households Rather Than as Individuals?

Abstract

Policy makers and researchers have traditionally relied on information reported on estate tax returns in their analyses of the transfers by the wealthy. Reflecting the uniqueness of the reporting requirements, information such as that on bequests and estate tax liabilities are reported on an individual basis. This paper explores the implications of evaluating the reported information on a household, rather than individual, basis. Households, and information on their wealth and transfers, are constructed by linking the estate tax returns of husbands and wives filed during 1982-2003. Preliminary evidence suggests that the burden of taxation and pattern of charitable bequests and lifetime gifts as gleaned on a household basis are quite distinct from those commonly reported using data on individuals. Indeed and when measured on a household basis, we observe greater generosity in charitable bequests and lifetime gifts, as well as a greater tax burden.

Keywords: estate tax, gifts, bequests

JEL Classification: D19, H31