Estate taxes could play a stronger role in addressing inequality, finds a new OECD report

Inheritance taxation can be an important instrument to address inequality particularly in the current context of persistently high wealth inequality and new pressures on public finances linked to the Covid-19 pandemic according to a new Organisation for Economic Co-operation and Development (OECD) report.

Inheritance Taxation in OECD Countries provides a comparative assessment of inheritance estate and gift taxes in the 37 members of the OECD. It shows on average the inheritances and gifts reported by the wealthiest households (top 20%) are close to 50 times higher than those reported by the poorest households (bottom 20%).

Most OECD countries levy inheritance or estate taxes – 24 in total. However these typically raise very little revenue representing only 0.5% of total tax collected. Generous tax exemptions and other forms of relief are a key factor limiting revenue from these taxes according to...