Resource title

Optimum taxation of inheritances

Resource image

image for OpenScout resource :: Optimum taxation of inheritances

Resource description

We incorporate the fact that inheritances create a second distinguishing characteristic of individuals, in addition to earning abilities, into an optimum income taxation model with bequests motivated by joy of giving. We show that a tax on inheritances and a uniform tax on all expenditures including bequests are equivalent and that either is desirable, according to an intertemporal social objective, if on average high-able individuals have larger inherited endowments than low-able. We demonstrate that such a situation results as the outcome of a process with stochastic transition of abilities over generations, if all descendants are more probable to have their parent s ability rank than any other.

Resource author

Johann K. Brunner, Susanne Pech

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26364

Resource license

Adapt according to the presented license agreement and reference the original author.