Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201470
Authors: 
Escobar, Sebastian
Ohlsson, Henry
Selin, Håkan
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 2019:6
Abstract: 
We study tax-driven intergenerational asset shifting using a salient tax discontinuity and rich data on both donors and recipients. When the Swedish inheritance tax was in place, heirs could lower their inheritance tax bills by passing on part of the inheritance to their children. We present evidence on strong and precise responses to this incentive. We quantify optimization frictions, and we show that they are small in this setting. Both intensive and extensive margin policy responses can be rationalized by a simple model in which agents face small frictions at the extensive margin. Descriptive evidence suggests that the policy response is associated with the abundant supply of cheap legal advice on tax planning.
Subjects: 
tax avoidance
tax rate elasticity
inheritance taxation
inter vivos gifts
JEL: 
H21
H24
H26
Document Type: 
Working Paper

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