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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/61050
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| Title: | | The bequest tax as long-term care insurance  |
| Authors: | | Brunner, Johann K. |
| Issue Date: | | 2012 |
| Series/Report no.: | | CESifo Working Paper: Public Finance 3901 |
| Abstract: | | I study a model of a representative individual who has a motive for leaving bequests and is at risk of needing long-term care in old age. I assume - as is typical for OECD countries - that the individual is not fully insured against this risk. Moreover, at realization the individual is unable to adapt labor supply or consumption; then expenditures for long-term care result in a one-to-one reduction of the estate. In this situation a tax on bequests provides insurance and its introduction causes a smaller deadweight loss than an income or consumption tax. I also characterize the optimal tax and transfer system in this model. |
| Subjects: | | estate tax long-term care insurance |
| JEL: | | H21 H24 I13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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