Determinants of inheritance and gifts taxation in the European Union

Kudła, Janusz; Woźniak, Rafał; Walczyk, Konrad; Dudek, Maciej; Kruszewski, Robert

doi:10.2478/ijme-2023-0004

Figures & Tables

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
Independence of youth	(0.000)	(0.000)	(0.000)
75+ share	0.215***	0.201***	0.215***
75+ share	(0.08)	(0.09)	(0.08)
Aging ratio	−0.004	0.001	−0.004
Aging ratio	(0.01)	(0.01)	(0.01)
Life expectancy	−0.001***	−0.001***	−0.001***
Life expectancy	(0.00)	(0.000)	(0.00)
Migration (sign)	0.001	−0.001	−0.001
Migration (sign)	(0.00)	(0.00)	(0.00)
GDP per capita	−0.004*
GDP per capita	(0.09)
GDP per capita PPS		−3.495
GDP per capita PPS		(16.92)
Wealth per capita			−0.000
Wealth per capita			(0.00)
Inflation	−0.000	0.000	−0.000
Inflation	(0.00)	(0.00)	(0.00)
Unemployment	−0.001***	−0.001***	−0.001***
Unemployment	(0.00)	(0.00)	(0.00)
Unemployment²	0.000***	0.0000***	0.0000***
Unemployment²	(0.00)	(0.00)	(0.00)
Openness	0.002	0.001	0.002
Openness	(0.00)	(0.00)	(0.00)
Deficit (% of GDP)	−0.035***	−0.034***	−0.034***
Deficit (% of GDP)	(0.01)	(0.01)	(0.01)
Revenue to GDP	−0.032*	−0.045**	−0.032*
Revenue to GDP	(0.02)	(0.02)	(0.02)
Subsidies (% of GDP)	0.06	0.054	0.062
Subsidies (% of GDP)	(0.08)	(0.10)	(0.09)
Other transfers (% of GDP)	−0.037	−0.114	−0.039
Other transfers (% of GDP)	(0.08)	(0.09)	(0.08)
Median to mean	−0.000	−0.001	−0.000
Median to mean	(0.00)	(0.00)	(0.00)
Egalitarian democracy index	0.081***	0.095***	0.082***
Egalitarian democracy index	(0.01)	(0.01)	(0.01)
Economic left-right scale	−0.000	−0.001*	−0.000
Economic left-right scale	(0.00)	(0.00)	(0.00)
Illiberalism	−0.008***	−0.009***	−0.008***
Illiberalism	(0.00)	(0.00)	(0.00)
Big countries^#	0.016**	0.018**	0.031***
Big countries^#	(0.01)	(0.01)	(0.01)
Constant	0.586***	0.568***	0.561***
Constant	(0.13)	(0.13)	(0.12)
sigma_u	0.008***	0.009***	0.008***
sigma_u	(0.00)	(0.000)	(0.00)
sigma_e	0.006***	0.006***	0.0063**
sigma_e	(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
Independence of youth	(0.09)	(0.12)	(0.12)	(0.09)	(0.12)
75+ share	971.34***	1,053.99***	1,016.6***	798.228***	907.16***
75+ share	(186.56)	(202.99)	(239.93)	(133.78)	(165.65)
Aging ratio	−62.09***	−70.97***	−70.73***	−59.31***	−63.87***
Aging ratio	(11.77)	(12.31)	(13.99)	(9.86)	(9.64)
Life expectancy	−1.145	−1.369	−1.599	−0.512	−0.55
Life expectancy	(0.72)	(0.85)	(1.01)	(0.64)	(0.6)
Migration (sign)	−1.308	−1.829	−2.286	−2.953	−1.81
Migration (sign)	(2.38)	(2.52)	(2.47)	(2.67)	(2.41)
GDP per capita	−3.262
GDP per capita	(123.93)
GDP per capita PPS		10,936.894
GDP per capita PPS		(37,191.26)
Wealth per adult			0.131
Wealth per adult			(0.23)
Inflation	−0.24	−0.188	−0.212		−0.212
Inflation	(0.4)	(0.49)	(0.47)		(0.47)
Unemployment	0.125	−0.65	−0.928		0.14
Unemployment	(1.14)	(1.37)	(1.31)		(0.76)
Unemployment²	−0.009	0.012	0.015		−0.022
Unemployment²	(0.01)	(0.01)	(0.01)		(0.03)
Openness	6.748***	14.058***	13.038***		8.081
Openness	(2.58)	(3.3)	(3.4)		(3.27)
Deficit (% of GDP)	−17.869	−45.532	−38.856		−29.303
Deficit (% of GDP)	(34.31)	(38.5)	(37.12)		(37.8)
Revenue to GDP	−29.866	7.219	13.096		19.882
Revenue to GDP	(38.37)	(49.2)	(40.83)		(48.05)
Subsidies (% of GDP)	195.229	193.637	198		−51.89
Subsidies (% of GDP)	(244.81)	(298.12)	(250.26)		(252.54)
Other transfers (% of GDP)	185.668	367.259	361.802		155.646
Other transfers (% of GDP)	(204.34)	(260.93)	(255.71)		(232.86)
Median to mean <0.4	4.999**	1.722	0.562	1.333
Median to mean <0.4	(2.28)	(2.35)	(2.1)	(1.79)
Egalitarian democracy index	−11.579	−19.586	25.821	6.269
Egalitarian democracy index	(17.89)	(18.21)	(17.22)	(12.5)
Economic left-right scale	0.056	0.5	0.449	0.572
Economic left-right scale	(072)	(0.87)	(0.89)	(0.79)
Illiberalism	−1.69	−1.272	−1.285	−2.847
Illiberalism	(4.53)	(5.54)	(5.28)	(4.09)
Big countries^#	9.186**	21.718***	21.861***		12.695**
Big countries^#	(3.8)	(5)	(4.32)		(6.21)
Constant	49.759	51.073	69.962	26.567	13.949
Constant	(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
Independence of youth	(0.05)	(0.05)	(0.05)	(0.05)	(0.05)
75+ share	281.55***	284.99***	279.08***	248.07***	294.80***
75+ share	(83.62)	(79.81)	(79.52)	(76.30)	(79.07)
Aging ratio	−15.79***	−17.39***	−15.82***	−16.88***	−16.65***
Aging ratio	(4.96)	(4.90)	(4.70)	(4.77)	(4.62)
Life expectancy	−0.61*	−0.86**	−0.56*	−0.04	−0.55**
Life expectancy	(0.34)	(0.36)	(0.31)	(0.22)	(0.24)
Migration (sign)	−0.37	−0.36	−0.37	−0.28	−0.39
Migration (sign)	(0.86)	(0.87)	(0.87)	0.59	(0.83)
GDP per capita	13.52
GDP per capita	(59.00)
GDP per capita PPS		15,485.99
GDP per capita PPS		(13,033.01)
Wealth per adult			−0.002
Wealth per adult			(0.088)
Inflation	−0.15	−0.15	−0.15		0.15
Inflation	(0.14)	(0.14)	(0.14)		(0.14)
Unemployment	0.41	0.51*	0.40		0.34
Unemployment	(0.27)	(0.28)	(0.27)		(0.25)
Unemployment²	−0.02*	−0.02*	−0.02		−0.02
Unemployment²	(0.01)	(0.01)	(0.01)		(0.01)
Openness	1.29	1.49*	1.26		1.34
Openness	(0.91)	(0.89)	(0.86)		(0.87)
Deficit (% of GDP)	−1.22	−2.02	−0.64		−0.92
Deficit (% of GDP)	(6.12)	(5.97)	(5.76)		(5.67)
Revenue to GDP	−3.68	−3.00	−5.84		−5.11
Revenue to GDP	(13.77)	(11.35)	(11.00)		(10.43)
Subsidies (% of GDP)	125.71	124.7	123.80		112.37
Subsidies (% of GDP)	(89.66)	(86.00)	(85.24)		(83.73)
Other transfers (% of GDP)	−15.24	11.59	−14.26		6.35
Other transfers (% of GDP)	(84.85)	(86.62)	(83.81)		(72.92)
Median to mean <0.4	0.05	0.08	0.04	0.06
Median to mean <0.4	(0.65)	(0.65)	(0.64)	(0.58)
Egalitarian democracy index	−3.17	−3.73	−2.89	−1.09
Egalitarian democracy index	(6.87)	(6.80)	(6.83)	(5.63)
Economic left-right scale	0.41	0.40	0.41	0.34
Economic left-right scale	(0.28)	(0.28)	(0.28)	(0.27)
Illiberalism	−1.80	−1.39	−1.82	−1.17
Illiberalism	(2.19)	(2.22)	(2.19)	(1.97)
Big countries^#	15.82***	17.21***	16.23***		15.38***
Big countries^#	(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

Determinants of inheritance and gifts taxation in the European Union

Figures & Tables

Figure 1.

Results of panel tobit correlated-random effects models

The types of inheritance tax design in the sample

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

Marginal effects of the models from Table 3

Descriptive statistics of independent variables

Results of random effects ordered logistic models

Paradigm

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