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Inheritance Taxation: Redistribution and Predistribution

Frank A. Cowell

Dirk Van de gaer

Chang He

Inequality, Taxation and Intergenerational Transmission

ISBN: 978-1-78756-458-9, eISBN: 978-1-78756-457-2

Publication date: 28 December 2018

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).

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Acknowledgements

Acknowledgments

We are grateful to STICERD for hosting Dirk Van de gaer in 2017 and making our collaboration possible and to Ghent University for financial support.

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

Publisher

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Emerald Publishing Limited