Fabian Kindermann, Lukas Mayr, Dominik Sachs, 04 December 2018

Although inheritance taxes are of growing importance for Western economies in raising government revenue, little is known about how inheritance taxation affects individuals’ incentives to work. This column explores how much additional labour income tax revenue from heirs the government can expect to obtain for each euro of revenue raised directly through inheritance taxes. It concludes that additional labour tax payments from heirs, resulting from an increase in bequest taxes, are of sizable magnitude and should be taken into account in fiscal planning and welfare analysis.

Tony Atkinson, Peter Backus, John Micklewright, 24 March 2018

Many governments seek to encourage charitable giving, both in life and upon death, via favourable treatment in the tax code. This column uses new data from the UK to examine how estate size and the inheritance tax threshold influence the decision to make a bequest to charity. The likelihood of including a bequest in a will rises modestly over the bottom half of the estate size distribution, and more rapidly over the upper tail. The results also suggest that the inheritance tax leads to an increase in charitable intent.

Tullio Jappelli, Mario Padula, Giovanni Pica, 26 February 2010

What are the effects of inheritance tax on bequests and tax avoidance? This column examines data from Italy suggesting that the abolition of transfer taxes increased real estate inheritance by around 2 percentage points. Given that the ratio of real estate to total wealth exceeds 85% for the over 60s in Italy, it is likely that at least part of this increase is a genuine effect.

César Molinas, 01 April 2009

Deflation risks are more related to very low inter-temporal discount rates than to falling prices. This column argues that long-term pre-emptive action should be channelled through taxation rather than central banks.

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