nep-pub New Economics Papers
on Public Finance
Issue of 2006‒11‒04
one paper chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Progressive Estate Taxation By Emmanuel Farhi; Ivan Werning

  1. By: Emmanuel Farhi; Ivan Werning
    Abstract: For an economy with altruistic parents facing productivity shocks, the optimal estate taxation is progressive: fortunate parents should face lower net returns on their inheritances. This progressivity reflects optimal mean reversion in consumption, which ensures that a long-run steady state exists with bounded inequality - avoiding immiseration.
    JEL: E6
    Date: 2006–10

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