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The legacy of the Swedish gift and inheritance tax, 1884–2004

Published online by Cambridge University Press:  11 March 2011

HENRY OHLSSON
HENRY OHLSSON*
Affiliation:
Department of Economics, Uppsala University and Uppsala Center for Fiscal Studies (UCFS), Box 513, SE-751 20 Uppsala, [email protected]
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Abstract

The objective of this article is to study how people change their behaviour when taxes change. I follow the revenue from gift, inheritance and estate taxes in Sweden over more than a century. Second, I focus on a unique episode during the second half of the 1940s when gifts and gift tax revenue exploded. I have access to aggregate tax revenue data since 1884. Moreover, I have constructed a rich micro-data set of all gifts reported during the period 1942–9 in one county. A first main result is that gifts, inheritances and estates were never important sources of tax revenue. Tax revenue as a share of GDP and total government revenue had already reached peaks in the 1930s. The role of these taxes has instead primarily been equity and to provide integrity for other tax bases. Second, expectations were important. Gift tax revenue during the 1940s started to increase long before a new estate tax and increased wealth taxation were decided and implemented. The increase began even before the legislative process started. Third, economic power and economic control were important. Parents gave to their children to avoid taxes, but only when the expected gain became large enough and in ways that left them with as much economic power as possible.

Type
Research Article
Information
European Review of Economic History , Volume 15 , Issue 3 , December 2011 , pp. 539 - 569
Copyright
Copyright © European Historical Economics Society 2011

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