Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/38890
Authors: 
Cremer, Helmuth
Gahvari, Firouz
Pestieau, Pierre
Year of Publication: 
2010
Series/Report no.: 
CESifo working paper Public Finance 3094
Abstract: 
When accidental bequests signal otherwise unobservable individual characteristics such as productivity and longevity, the tax administration should partition the population into two groups: One consisting of people who do not receive an inheritance and the other of those who do. The first tagged group gets a second-best tax à la Mirrlees; the second group a first-best tax schedule. The solution implies that receiving an inheritance makes high-ability types worse off and low-ability types better off. High-ability individuals will necessarily face a bequest tax of more than 100%, while low-ability types face a bequest tax that can be smaller as well as larger than 100% and may even be negative.
Subjects: 
accidental bequests
estate tax
tagging
first best
second best
JEL: 
H21
Document Type: 
Working Paper

Files in This Item:
File
Size
327.55 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.