Death Tax Affects Death Rates

I previously blogged about the lack of an estate tax in 2010 giving wealthy elderly individuals an incentive to die before the end of the year.

Australian academics conducted a study entitled Did the Death of Australian Inheritance Taxes Affect Deaths?, 6 Topics in Economic Analysis & Policy 23 (2006).  This study investigated whether or not the elimination of their death tax in 1979 actually affected death rates. They found that approximately 50 deaths were bumped from the week before the tax was eliminated to the week after. The academics concluded “that over the very short run, the death rate may be highly elastic with respect to the inheritance tax rate.” The question is whether or not the same thing will happen in the United States, but in the opposite direction.

See Daniel J. Mitchell, The Deadly Impact of the Death Tax, Forbes, July 14, 2010.