Death and taxes: An evaluation of the impact of prospective policies for taxing wealth at the time of death

Robert B. Avery, Daniel Jose Grodzicki, Kevin B. Moore

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We study the efficacy of a capital gains tax relative to the current estate tax. Using wealth data on U.S. households, we forecast changes in household wealth and calculate the importance of untaxed wealth in bequeathed estates. We then compare the aggregate and distributional burden of the current estate tax to policies in which only unrealized capital gains are subject to tax. We estimate that, in the coming decade, unrealized capital gains will comprise nearly half of the gross estate for estates worth over $50 million. Policies taxing capital gains can potentially raise more revenue than the current estate tax, but not without a substantial increase in the fraction of households facing a tax. Due to the high concentration of unrealized gains among the wealthy, we find that, although a modest capital gains allowance substantially reduces tax revenue, it sharply focuses the tax burden on the wealthiest households.

Original languageEnglish (US)
Pages (from-to)601-632
Number of pages32
JournalNational Tax Journal
Volume68
Issue number3
DOIs
StatePublished - Sep 1 2015

Fingerprint

Evaluation
Tax
Wealth
Capital gains
Household
Estate tax
Capital gains tax
Tax revenues
Tax burden
Efficacy
Revenue
Household wealth
Burden

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

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Death and taxes : An evaluation of the impact of prospective policies for taxing wealth at the time of death. / Avery, Robert B.; Grodzicki, Daniel Jose; Moore, Kevin B.

In: National Tax Journal, Vol. 68, No. 3, 01.09.2015, p. 601-632.

Research output: Contribution to journalArticle

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