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s10797-008-9080-1_0
Journal article

Pareto-improving bequest taxation

BP2-STS

  • 2009
Published in:
  • International Tax and Public Finance. - Springer Science and Business Media LLC. - 2009, vol. 16, p. 647-669
Bequest taxation
Bequests
Education
Pareto improvement
Economics and Econometrics
Finance
Accounting
English Altruistic parents may transfer resources to their offspring by providing education, and by leaving bequests. We show that in the presence of wage taxation, a small bequest tax may improve efficiency in an overlapping-generations framework with only intended bequests, by enhancing incentives of parents to invest in their children’s education. We also calculate an optimal mix of wage and bequest taxes with alternative parameter combinations. In all cases, the optimal wage tax rate is clearly higher than the optimal bequest tax rate, but the latter is generally positive when the required government revenue in the economy is sufficiently high. If educational investment is partly unobservable for the government, these results qualitatively hold also when allowing for education subsidies.
Faculty
Faculté des sciences économiques et sociales et du management
Department
Département d'économie politique
Language
  • English
Classification
Economics
License
Rights reserved
Open access status
green
Identifiers
Persistent URL
https://folia.unifr.ch/unifr/documents/323615
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