Intergenerational disagreements in labor supply and optimal bequest taxation

Abstract

This paper studies optimal taxation of bequests in a model where altruistic parents and their offspringdisagree on the offspring's labor supply decision. I show that whenever offspring is too lazy from theparent's perspective and there are income effects on labor supply, optimal policy involves a subsidy onbequests.© 2017 Central Bank of The Republic of Turkey. Production and hosting by Elsevier B.V. This is an openaccess article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)