American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Income and Substitution Effects of Estate Taxation
American Economic Review
vol. 103,
no. 3, May 2013
(pp. 484–88)
Abstract
This paper evaluates the effect of estate taxes on labor supply. The analysis decomposes the effect of estate taxation into the substitution effect of relative price changes and the two income effects for which the estate tax is responsible. These two income effects arise from tax burdens on those who leave estates plus tax burdens on those who receive them. Despite the double income burden of the estate tax, existing empirical evidence suggests that the net effect of estate taxation on aggregate labor supply is uncertain.Citation
Hines, James R Jr. 2013. "Income and Substitution Effects of Estate Taxation." American Economic Review, 103 (3): 484–88. DOI: 10.1257/aer.103.3.484Additional Materials
JEL Classification
- D14 Personal Finance
- D64 Altruism; Philanthropy
- H21 Taxation and Subsidies: Efficiency; Optimal Taxation
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H71 State and Local Taxation, Subsidies, and Revenue