Apr
16

Charitable Bequests and Taxes on Inheritances and Estates : Aggregate Evidence from across States and Time

By Katherine Lim, Jeff Rohaly
This paper examines the impact of wealth transfer taxes on charitable bequests. We exploit the fact that federal and state taxes on estates and inheritances vary over time, states, and real wealth levels. The effects of taxes are estimated using pooled cross-sectional data spanning several decades, based on aggregated information from federal estate tax returns. Under several different specifications, we find evidence of a strong incentive effect of estate and inheritance taxes on charitable bequests.
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