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Wednesday, August 14, 2013

Timing of Death and the Repeal of the Swedish Inheritance Tax

Timing of Death and the Repeal of the Swedish Inheritance Tax, 45 J. Socio-Econ. 113 (Aug. 2013):

In response to the repeal of the Swedish inheritance tax people postponed death to avoid taxes. This is an example of the far-reaching behavioral effects of economic incentives and of unintended consequences of policy changes. Using individual data, including information on taxable estates, we find that deceased with, compared to those without, tax incentives to postpone death were 10 percentage points more likely to die the day after rather than the day before the repeal. An extended analysis suggests that the timing of deaths was affected not only during these two days but during a longer surrounding period.

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Comments

Best guess: A large part of deaths follows after suspension of life supporting care like IV fluids and nutrition. When to stop this support is often relying on the wishes of the dying or the relatives. I would expect a change in taxation as well known as this one to influence the timing of the suspension for a significant number of cases.

Posted by: GSo | Aug 14, 2013 6:28:01 AM