Inheritance Taxation: Redistribution and Predistribution

Abstract

It is well known that taxes on the transfer of wealth typically raise very little revenue. However, this does not mean that they are ineffective as tools for redistribution. In this chapter, we show how important such taxes can be in the long-run distribution of wealth, reducing equilibrium inequality (the “predistribution” effect) by a much larger amount than what is apparent in terms of the immediate impact of the tax (the “redistribution” effect).

Citation

Cowell, F.A., Van de gaer, D. and He, C. (2018), "Inheritance Taxation: Redistribution and Predistribution", Bishop, J.A. and Rodríguez, J.G. (Ed.) Inequality, Taxation and Intergenerational Transmission (Research on Economic Inequality, Vol. 26), Emerald Publishing Limited, Leeds, pp. 1-13. https://doi.org/10.1108/S1049-258520180000026002