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Determinants of inheritance and gifts taxation in the European Union

Janusz Kudła
Janusz Kudła
, 
Rafał Woźniak
Rafał Woźniak
, 
Konrad Walczyk
Konrad Walczyk
, 
Maciej Dudek
Maciej Dudek
 et 
Robert Kruszewski
Robert Kruszewski
   | 30 sept. 2023
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Article Category: Empirical Paper
Publié en ligne: 30 sept. 2023
Pages: 225 - 242
Reçu: 14 mai 2022
Accepté: 09 janv. 2023
DOI: https://doi.org/10.2478/ijme-2023-0004
Mots clés
© 2023 Janusz Kudła et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Figure 1.

Marginal effects for unemployment at 5% in relation to life expectancy.
Marginal effects for unemployment at 5% in relation to life expectancy.

Results of panel tobit correlated-random effects models

Dependent: Tax revenues to GDP tobit_cre_1 tobit_cre_2 tobit_cre_3
(1) (2) (3)
Independence of youth −0.000 −0.000 −0.000
(0.000) (0.000) (0.000)
75+ share 0.215*** 0.201*** 0.215***
(0.08) (0.09) (0.08)
Aging ratio −0.004 0.001 −0.004
(0.01) (0.01) (0.01)
Life expectancy −0.001*** −0.001*** −0.001***
(0.00) (0.000) (0.00)
Migration (sign) 0.001 −0.001 −0.001
(0.00) (0.00) (0.00)
GDP per capita −0.004*
(0.09)
GDP per capita PPS −3.495
(16.92)
Wealth per capita −0.000
(0.00)
Inflation −0.000 0.000 −0.000
(0.00) (0.00) (0.00)
Unemployment −0.001*** −0.001*** −0.001***
(0.00) (0.00) (0.00)
Unemployment2 0.000*** 0.0000*** 0.0000***
(0.00) (0.00) (0.00)
Openness 0.002 0.001 0.002
(0.00) (0.00) (0.00)
Deficit (% of GDP) −0.035*** −0.034*** −0.034***
(0.01) (0.01) (0.01)
Revenue to GDP −0.032* −0.045** −0.032*
(0.02) (0.02) (0.02)
Subsidies (% of GDP) 0.06 0.054 0.062
(0.08) (0.10) (0.09)
Other transfers (% of GDP) −0.037 −0.114 −0.039
(0.08) (0.09) (0.08)
Median to mean −0.000 −0.001 −0.000
(0.00) (0.00) (0.00)
Egalitarian democracy index 0.081*** 0.095*** 0.082***
(0.01) (0.01) (0.01)
Economic left-right scale −0.000 −0.001* −0.000
(0.00) (0.00) (0.00)
Illiberalism −0.008*** −0.009*** −0.008***
(0.00) (0.00) (0.00)
Big countries# 0.016** 0.018** 0.031***
(0.01) (0.01) (0.01)
Constant 0.586*** 0.568*** 0.561***
(0.13) (0.13) (0.12)
sigma_u 0.008*** 0.009*** 0.008***
(0.00) (0.000) (0.00)
sigma_e 0.006*** 0.006*** 0.0063**
(0.00) (0.000) (0.000)
All variables’ joint insignificance 318.92*** 344.71*** 337.99***
Observations 625 536 625
Countries 27 27 27
Individual effects joint insignificance 436.26*** 379.7*** 416.78***
Log-likelihood 1,966 1,665.2 1,968.2
AIC −3,852 −3,250.4 −3,854.4
BIC −3,674.5 −3,079 −3,672.4

The types of inheritance tax design in the sample

Countries Type of inheritance tax design
Austria Progressive with exceptions 1995–2008 No tax since 2009
Belgium, Bulgaria, France, Finland, Germany, Greece, Luxembourg, the Netherlands, Poland, Slovenia, Spain Progressive with exceptions
Czechia Progressive with exceptions, 1995–2013 No tax since 2014
Denmark Proportional tax
Cyprus, Estonia, Romania No tax
Hungary, Ireland, Malta, Portugal, the United Kingdom Indirectly progressive
Italy Progressive with exceptions, 1995–2000 and 2007–2019 No tax 2001–2006
Latvia No tax 1995–2002 Progressive taxation since 2003
Lithuania No tax 1995–1996 Progressive taxation since 1997
Slovakia Progressive with exceptions, 1995–2003 No tax since 2004
Sweden Progressive with exceptions, 1995–2004 No tax since 2005

Results of panel logit random effects models for the presence or absence of an inheritance tax

Dependent: Tax imposed or not imposed (1) (2) (3) (4) (5)
Independence of youth 0.269*** 0.216* 0.258** 0.27*** 0.197
(0.09) (0.12) (0.12) (0.09) (0.12)
75+ share 971.34*** 1,053.99*** 1,016.6*** 798.228*** 907.16***
(186.56) (202.99) (239.93) (133.78) (165.65)
Aging ratio −62.09*** −70.97*** −70.73*** −59.31*** −63.87***
(11.77) (12.31) (13.99) (9.86) (9.64)
Life expectancy −1.145 −1.369 −1.599 −0.512 −0.55
(0.72) (0.85) (1.01) (0.64) (0.6)
Migration (sign) −1.308 −1.829 −2.286 −2.953 −1.81
(2.38) (2.52) (2.47) (2.67) (2.41)
GDP per capita −3.262
(123.93)
GDP per capita PPS 10,936.894
(37,191.26)
Wealth per adult 0.131
(0.23)
Inflation −0.24 −0.188 −0.212 −0.212
(0.4) (0.49) (0.47) (0.47)
Unemployment 0.125 −0.65 −0.928 0.14
(1.14) (1.37) (1.31) (0.76)
Unemployment2 −0.009 0.012 0.015 −0.022
(0.01) (0.01) (0.01) (0.03)
Openness 6.748*** 14.058*** 13.038*** 8.081
(2.58) (3.3) (3.4) (3.27)
Deficit (% of GDP) −17.869 −45.532 −38.856 −29.303
(34.31) (38.5) (37.12) (37.8)
Revenue to GDP −29.866 7.219 13.096 19.882
(38.37) (49.2) (40.83) (48.05)
Subsidies (% of GDP) 195.229 193.637 198 −51.89
(244.81) (298.12) (250.26) (252.54)
Other transfers (% of GDP) 185.668 367.259 361.802 155.646
(204.34) (260.93) (255.71) (232.86)
Median to mean <0.4 4.999** 1.722 0.562 1.333
(2.28) (2.35) (2.1) (1.79)
Egalitarian democracy index −11.579 −19.586 25.821 6.269
(17.89) (18.21) (17.22) (12.5)
Economic left-right scale 0.056 0.5 0.449 0.572
(072) (0.87) (0.89) (0.79)
Illiberalism −1.69 −1.272 −1.285 −2.847
(4.53) (5.54) (5.28) (4.09)
Big countries# 9.186** 21.718*** 21.861*** 12.695**
(3.8) (5) (4.32) (6.21)
Constant 49.759 51.073 69.962 26.567 13.949
(47.41) (55.83) (61.98) (41.25) (39.07)
Observations 421 421 421 421 421
Countries 27 27 27 27 27
Joint insignificance (chi-square statistics) 82.179*** 89.516*** 90.699*** 51.82*** 73.79***
Std. dev. of the individual effect 13.45 15.705 19.753 19.546 13.81
Individual effects insignificance 232.112*** 241.938*** 247.546*** 295.48*** 298.3***
AIC 108.674 103.876 104.197 97.418 96.204
BIC 193.569 188.881 189.092 141.887 160.887

Marginal effects of the models from Table 3

Marginal effects
E(y|0<=y)
tobit_cre_1 tobit_cre_2 tobit_cre_3
Independence of youth −0.0000 −0.0000 −0.0000
75+share 0.2153*** 0.2151*** 0.2014**
Aging ratio −0.0043 −0.0043 0.0007
Life expectancy −0.0014*** −0.0013** −0.0013**
Migration sign 0.001 0.001 0.0006
GDP per capita −0.0045
GDP per capita PPS −3.4953
Wealth per capita −0.0000
Inflation −0.0002 −0.0002 0.0001
Unemployment −0.0012*** −0.0012*** −0.0014***
Unemployment2 0.0000*** 0.0000*** 0.0000***
Openness 0.0024 0.0024 0.0013
Deficit (% of GDP) −0.0347*** −0.0345*** −0.0342***
Revenue to GDP −0.0318* −0.032* −0.0449**
Subsidies (%of GDP) 0.0599 0.0621 0.0543
Other transfers (% of GDP) −0.0369 −0.039 −0.1138
Median to mean −0.0000 −0.0001 −0.0006
Egalitarian democracy index 0.0815*** 0.0816*** 0.0952***
Economic left-right scale −0.0003 −0.0003 −0.0005*
Illiberalism −0.0076*** −0.0077*** −0.0088***
Big countries# 0.0157*** 0.0308*** 0.0184**

Descriptive statistics of independent variables

Observations Mean St. dev. Min Max
Independence of youth 667 49 14.4 15.7 74.4
75+ share 675 0.07 0.02 0.04 0.12
Aging ratio 675 0.87 0.23 0.38 1.53
Life expectancy 675 78.05 3.49 67.7 84
Migration (sign) 675 0.73 0.45 0 1
GDP per capita 675 0.02 0.02 0.00 0.1
GDP per capita PPS 675 0.00 0.00 0.00 0.00
Wealth per adult 540 13.37 9.35 0.38 35.84
Inflation 666 3.22 7.59 −1.7 154.9
Unemployment 641 8.62 4.3 1.8 27.5
Unemployment2 641 92.77 105.39 3.24 756.25
Openness 669 1.13 0.61 0.43 4.08
Deficit (% of GDP) 675 −0.02 0.03 −0.32 −.07
Revenue to GDP 675 0.42 0.07 0.25 0.58
Subsidies (% of GDP) 675 0.01 0.01 0.00 0.05
Other transfers (% of GDP) 675 0.02 0.01 0.00 0.05
Median to mean <0.4 675 0.61 0.49 0 1
Egalitarian democracy index 675 0.75 0.09 0.34 0.88
Economic left-right scale 675 0.09 1.14 −2.43 2.8
Illiberalism 675 0.15 0.2 0.02 0.88
Big countries# 675 0.22 0.42 0 1

Results of random effects ordered logistic models

Dependent: Tax design type (1) (2) (3) (4) (5)
Independence of youth 0.05 0.06 0.05 0.04 0.04
(0.05) (0.05) (0.05) (0.05) (0.05)
75+ share 281.55*** 284.99*** 279.08*** 248.07*** 294.80***
(83.62) (79.81) (79.52) (76.30) (79.07)
Aging ratio −15.79*** −17.39*** −15.82*** −16.88*** −16.65***
(4.96) (4.90) (4.70) (4.77) (4.62)
Life expectancy −0.61* −0.86** −0.56* −0.04 −0.55**
(0.34) (0.36) (0.31) (0.22) (0.24)
Migration (sign) −0.37 −0.36 −0.37 −0.28 −0.39
(0.86) (0.87) (0.87) 0.59 (0.83)
GDP per capita 13.52
(59.00)
GDP per capita PPS 15,485.99
(13,033.01)
Wealth per adult −0.002
(0.088)
Inflation −0.15 −0.15 −0.15 0.15
(0.14) (0.14) (0.14) (0.14)
Unemployment 0.41 0.51* 0.40 0.34
(0.27) (0.28) (0.27) (0.25)
Unemployment2 −0.02* −0.02* −0.02 −0.02
(0.01) (0.01) (0.01) (0.01)
Openness 1.29 1.49* 1.26 1.34
(0.91) (0.89) (0.86) (0.87)
Deficit (% of GDP) −1.22 −2.02 −0.64 −0.92
(6.12) (5.97) (5.76) (5.67)
Revenue to GDP −3.68 −3.00 −5.84 −5.11
(13.77) (11.35) (11.00) (10.43)
Subsidies (% of GDP) 125.71 124.7 123.80 112.37
(89.66) (86.00) (85.24) (83.73)
Other transfers (% of GDP) −15.24 11.59 −14.26 6.35
(84.85) (86.62) (83.81) (72.92)
Median to mean <0.4 0.05 0.08 0.04 0.06
(0.65) (0.65) (0.64) (0.58)
Egalitarian democracy index −3.17 −3.73 −2.89 −1.09
(6.87) (6.80) (6.83) (5.63)
Economic left-right scale 0.41 0.40 0.41 0.34
(0.28) (0.28) (0.28) (0.27)
Illiberalism −1.80 −1.39 −1.82 −1.17
(2.19) (2.22) (2.19) (1.97)
Big countries# 15.82*** 17.21*** 16.23*** 15.38***
(3.93) (4.08) (3.92) (3.79)
Observations 421 421 421 421 421
Countries 27 27 27 27 27
Joint insignificance (chi-square statistics) 36.74** 37.43** 36.81** 21.63*** 34.98***
Std. dev. of the individual effect 13.29 13.73 13.52 13.62 13.19
Individual effects insignificance 380.06*** 407.51*** 400.03*** 463.74*** 467.39***
AIC 403.6 417.5 418.7 407.8 411.3
BIC 460.2 510.5 511.7 460.4 484.1
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