Journal article


Fair Inheritance Taxation in the Presence of Tax Planning


Publication Details
Author(s): Wrede M
Publisher: Elsevier BV
Publication year: 2014
Volume: 51
Pages range: 12-18
ISSN: 1053-5357
Language: English

Abstract

This paper presents an analysis of the extent to which tax planning affects the level of the inheritance tax rate that is perceived to be fair. In a survey with an experimental design conducted in Germany, tax planning was found to increase the fair tax rate by approximately 4 percentage points. The fair tax rate is determined by not only the size of the bequest, the relationship of the heir to the bequeather, and the type of bequest, but also by the perceived intentions of the bequeather. The preferred interpretation of the result is that families with pro-social motives should be taxed less than those without pro-social motives. The analysis described in this paper finds support in optimal tax theory. To this end, a simple model was developed that shows that taxation should not prevent individuals with joy-of-giving motives from contributing substantially more to the social good than individuals who do not share these motives.



Focus Area of Individual Faculties


How to cite
APA: Wrede, M. (2014). Fair Inheritance Taxation in the Presence of Tax Planning. Journal of Socio-Economics, 51, 12-18. https://dx.doi.org/10.1016/j.socec.2014.03.007

MLA: Wrede, Matthias. "Fair Inheritance Taxation in the Presence of Tax Planning." Journal of Socio-Economics 51 (2014): 12-18.

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