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on Public Finance |
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Issue of 2020‒12‒07
three papers chosen by |
| By: | Leroux, Marie-Louise (Université catholique de Louvain, LIDAM/CORE, Belgium); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | This paper studies the design of the optimal linear taxation of bequests when individuals differ in wage as well as in their risks of both mortality and old-age dependance. We assume that the government cannot distinguish between bequests motives, that is whether bequests resulted from precautionary reasons or from pure joy of giving reasons. Instead, we assume that it only observes the timing of bequests, that is whether they are made early in life or late in life. We show that, if the government is utilitarian, whether the taxation of early bequests should be given priority over the taxation of late bequests depends on the magnitude of insurance and redistributive concerns. While the efficiency concern unambiguously recom- mends taxation of early bequests, redistributive concerns yield ambiguous results. This indeterminacy comes from the fact that, in case of late death, the government cannot ob- serve the health status of the deceased. Whether the taxation of early bequests should be given priority depends on the specific relationships between wages and both risks of early death and of old-age dependence, as well as on the concavity of the joy of giving utility function. If the government is Rawlsian, it is optimal to tax early bequests if the survival chances of the poorest agents are very low. If they survive, but their chances to remain autonomous are very low, it is then optimal to tax early bequests if the poorest agents con- tribute relatively less to the taxation of early bequests than to the taxation of late bequests or if the joy of giving utility is extremely concave. |
| Keywords: | Bequest taxation; Long term care; Utilitarianism; Rawlsian welfare criterion; Old-age dependency |
| JEL: | H21 H23 I14 |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2020031&r=all |
| By: | Monisankar Bishnu; Cagri Kumru |
| Abstract: | In this paper, we extend the †A Note on the Annuity Role of Estate Tax†(Bishnu and Kumru (2020)) by incorporating social security system, consumption tax, and endogenous labor supply. In all these extensions, we show that estate tax cannot play the role of annuities. We also conducted robustness analysis by employing frequently used specifications for bequest motives. We show that the conclusion we reached in the †A Note on the Annuity Role of Estate Tax†is robust to changes in bequest specifications. |
| Keywords: | Bequests; Estate Tax; Annuity |
| JEL: | D15 E62 H21 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2020-676&r=all |
| By: | Claudio Daminato (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland); Massimo Filippini (CER–ETH – Center of Economic Research at ETH Zurich and Department of Economics, University of Lugano, Switzerland); Fabio Haufler (CER–ETH – Center of Economic Research at ETH Zurich, Switzerland) |
| Abstract: | This paper studies the impact of making personalized digital information available through a pension app on contributions to tax-favored retirement accounts. Using Swiss administrative pension fund data, we document limited take-up of fiscal incentives for retirement savings. Exploiting the staggered introduction of the pension app across occupational pension funds, we show that its availability increases individual tax-favored contributions. Men and higher-income earners are more likely to access the digital environment and respond to its introduction. These findings suggest that providing access to a pension app reduces information and transaction costs and facilitates the take-up of financial incentives for retirement saving. |
| Keywords: | Defined contribution plans, Fiscal incentives, Pension app, Savings |
| JEL: | D14 G51 H31 H55 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:20-347&r=all |