October 09, 2019
CORE C 035
Fair Inheritance Tax
Marius Vogel, University of Cologne, in exchange at CORE
This paper analyzes fair taxation in an intergenerational framework. The combination of different fairness axioms, most notably Transfer (consumption inequality reducing transfers between otherwise ‘identical’ individuals is socially desirable) and Laissez-faire (if everyone has the same skill level and receives no bequest, taxation is not necessary) imply a concentration on the worst-off in society. Well-being is measured in a particular way: It is given by the wage rate someone would need in a world without taxation and received bequest to be indifferent to the status quo. In terms of taxation the fairness axioms imply a concentration on the highest average taxes payed by low-wage earners, who do not receive a bequest. This research extends Fleurbaey & Maniquet (2006) to an intergenerational context and complements Piketty & Saez (2013) and Farhi & Werning (2010, 2013) from a fairness perspective.
Looking forward to seeing you all in the seminar!