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Dying to Save Taxes: Evidence from Estate Tax Returns on the Death Elasticity

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  • Wojciech Kopczuk
  • Joel Slemrod

Abstract

This paper examines data from U.S. federal tax returns to shed light on whether the timing of death is responsive to its tax consequences. We investigate the temporal pattern of deaths around the time of changes in the estate tax system periods when living longer, or dying sooner, could significantly affect estate tax liability. We find some evidence that there is a small death elasticity, although we cannot rule out that what we have uncovered is ex post doctoring of the reported date of death. However, the fact that we find that postponement, rather than acceleration, of death is more likely to occur suggests that this phenomenon is at last partly a real (albeit timing) response to taxation.

Suggested Citation

  • Wojciech Kopczuk & Joel Slemrod, 2001. "Dying to Save Taxes: Evidence from Estate Tax Returns on the Death Elasticity," NBER Working Papers 8158, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8158
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    References listed on IDEAS

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    1. William G. Gale & Joel B. Slemrod, 2001. "Rethinking the Estate and Gift Tax: Overview," NBER Working Papers 8205, National Bureau of Economic Research, Inc.
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    8. Joel Slemrod & Wojciech Kopczuk, 2000. "The Impact of the Estate Tax on the Wealth Accumulation and Avoidance Behavior of Donors," NBER Working Papers 7960, National Bureau of Economic Research, Inc.
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    11. Sjoquist, David L. & Walker, Mary Beth, 1995. "The Marriage Tax and the Rate and Timing of Marriage," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(4), pages 547-558, December.
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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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