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The purpose of this paper is to investigate the relationship of inheritance tax behavior with normative value principles and factors found relevant for income tax compliance. Also, it examines the influence of affectedness and earmarking on inheritance tax compliance. Furthermore, it compares two countries similar in tax morale, tax culture as well as dominant normative value principles, Austria and Germany, of which one – Germany – levies inheritance taxes and the other – Austria – is debating its reintroduction.

A two (affected vs nonaffected) by two (Austria vs Germany) by two (inheritance tax vs stock profit tax) by three (no earmarking vs social justice earmarking vs equality of opportunity earmarking) experimental online questionnaire was conducted with 296 Austrians and 230 Germans.

Normative value principles and other socio-psychological variables play an important role concerning inheritance tax behavior. Affectedness does not influence inheritance tax compliance. Earmarking inheritance tax to projects corresponding to these value principles increases inheritance tax compliance in the Austrian sample and could represent a measure to increase inheritance tax compliance in countries implementing inheritance tax or increasing inheritance tax.

This study draws a comprehensive picture of the socio-psychological variables relevant to inheritance tax behavior and tests the effect of earmarking as a policy measure to increase inheritance tax compliance.

This paper aims to propose a tax reform that would reduce income taxes and other indirect taxes while at the same time increasing inheritance and estate taxes. Such a reform is economically very efficient and would certainly equalize income distribution.

A wide review of the death and inheritance taxes in the USA and Europe is presented.

Government's revenue from inheritance and gifts is lower than 1 percent of GDP. This is due mainly to a combination of considerable tax‐free allowances for the closest relatives and high thresholds where the top rates apply. No empirical examination of the effect of inheritance tax on economic growth or economic efficiency could be found.

Because inheritance taxes are economically efficient, they improve the immoral unequal income distribution drastically. Therefore, it should be concluded that inheritance tax must be implemented.

This paper discusses the various economic aspects of the proposed tax reform.

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).

What are the reasons for writing this paper? The purpose of this paper is to make the case for liberty, and free enterprise, against the criticisms of this system. Specifically, the present essay is an attempt to criticize the case for inheritance taxation. This is made by many, but the author focuses on James Buchanan's contribution to this support for socialism. The author does so because James Buchanan is widely known as a champion of capitalism and free markets, and he is nothing of the sort, at least in this one case.

The approach used in this paper is to quote widely from the adherents of inheritance taxes, and then to show the flaws in the cases they offer in support of this system.

The finding is that none of the arguments offered on behalf of inheritance taxation have been shown to be valid. There are flaws in all of them. This, of course, does not imply no such arguments can be shown to be successful; only that the ones herein cited do not justify this market interference.

Why do entrepreneurs engage in entrepreneurship? For a whole host of reasons, surely; these might in the extreme be as different as there are different entrepreneurs. But one motivation, certainly an important one, likely to be felt by most entrepreneurs, is to leave a bequest upon demise, so that one's heirs and loved ones may share in the fruits of one's entrepreneurial activities. Thus, taxes on inheritances, let alone those approaching the 100 percent level, must be anathema to at least most if not all entrepreneurial activities. The present paper makes the case against such attacks on wealth, bequests, inheritances.

To the best of the author's knowledge, although there are of course defenses of bequests, and critiques of Buchanan on other matters, there are no criticisms of this Nobel prize winning economist on this particular issue.

The purpose of this paper is to illustrate the centralization of control in the Israeli economy.

The paper uses data published by the Israeli stock market authority to identify owners holding more then 5 percent of a company's value.

The total worth of stocks traded in the Tel‐Aviv stock exchange was 690 billion shekels (about 180 billion current US dollars), while the worth of the 25 largest companies was about 479 billion shekels (69.4 percent). The party of interest holdings share in these companies was 35.2 percent (while the public share was 64.8 percent).

In order to reach economic efficiency, we are willing to pay the social cost of unequal income distribution. There is no reason not to use the same logic regarding the taxing of inheritance. If it is more economically efficient, inheritance should be taxed, although it has already been taxed in the past.

How can we improve income distribution without levying taxes that reduce economic efficiency? The answer is high taxes on inheritance.

The paper suggests a practical policy to reduce inequality in Israel.

The purpose of this paper is to study the concept of tax gap, that is the difference between the total amount of taxes collected and the total tax revenues that would be collected under full tax compliance.

The authors also present the methodology to estimate the gap for two taxes levied on wealth: the wealth tax and the inheritance and gift tax; both are administered in Spain by the regional tax authorities.

The authors point out that its estimation offers useful information about the relative size and nature of non-compliance, as well as its evolution over time. Likewise, the tax gap is a valuable instrument not only to define enforcement strategies of the tax administration but also to enhance its accountability. Nonetheless, the methodology used to estimate the tax gap and, consequently, the interpretation of the results is subject to limitations that are discussed in the paper.

Finally, the paper provides the results of the estimations obtained from using microdata: 44.34 per cent gap in the wealth tax and 41.26 per cent in the inheritance and gift tax.

The aim of this paper is to explore inheritance planning amongst small business owners, which is important due to the complex nature of a business proprietor's estate and the fact that the latter sometimes have specific aspirations regarding the succession of the enterprise.

The article highlights the problems that can arise if a business owner dies intestate and then considers the levels of will ownership amongst small business owners in South Wales and attitudes to inheritance planning.

The primary research conducted found that a significant number of small business owners have not made a will (51 percent) and that the reasons for not doing so are complex and varied.

Several themes emerged from the study, such as the importance of contact with professional advisers, the impact of culture on inheritance planning, reliance on trust, the problems associated with complicated family circumstances and the effect of the current economic climate on attitudes to inheritance planning

The purpose of this paper is to estimate the effect of the combined (Federal and state) estate, inheritance, and gift (EIG) tax burden per decedent on the number of firms in the USA.

Estimates are based on a longitudinal panel of 50 American states from 1988 to 2006.

The paper finds that the growth in the EIG tax burden per decedent significantly reduces the growth in the number of firms, especially small firms. The higher dissolution rate among small firms can be attributed to the asymmetric liquidity effect, which limits the ability of small business owners to raise the funds needed to pay the estate tax without liquidating their estates.

The estimates suggest that the reductions in EIG taxes, brought about by the passage of 2001 EGTRRA, have lead to a higher growth in the number of firms, ceteris paribus.

As of this writing, the future of the Federal estate tax looks uncertain. Policymakers should note that the estate tax lowers competition and economic growth, which hurts both the poor and the rich.

This study is the first to examine the impact of the combined (Federal and state) EIG tax burden on the number of firms using state-level panel data.

This is the second set of lecture notes from courses in public finance published in an archival volume in this series. Volume 19-C (2001) was entirely devoted to notes from lectures by E. R. A. Seligman at Columbia University. Two differences mark Seligman’s lectures and the lectures by Henry C. Simons at Chicago, as reported below. Seligman seems to have been lecturing primarily to students in tax administration, hence he presented very little economic theory; whereas Simons was lecturing to graduate students in economics, and presented relatively more theory. Seligman did not refrain from some passing of judgment but his lectures were largely descriptive and non-judgmental; whereas Simons has no hesitation in presenting his own normative approach on various issues. These issues tended strongly to focus on inequality, tax justice, and progressivity.