The Inter Vivos Gift Effect of 2009 Estate and Gift Tax Reform in Taiwan

• Main Authors: Li, Matt, 李家銘
• Other Authors: Chen, Joe
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/d3byym

碩士 === 國立政治大學 === 財政學系 === 105 === 　　In an effort to raise money to provide long-term care services, on Apr. 25, 2017 the government passed into law to increase the estate and gift tax. The reform will increase the tax burden of someone who has net estate valued above fifty million dollars and net gift valued above twenty-five million dollars. More importantly, the reform not only affects individuals’ tax plan decision, but also has real effects on decisions to make inter vivos gifts. A sound estate and gift tax system should meet the principle of efficiency and equity—both are determined by decisions that individuals made. While the effects of the recent reform are left to be examined after data becomes available, this paper sets to examine the effects on individuals inter vivos giving decisions of the estate and gift tax reform in 2009. 　　The database used in this study covers both estate and gift tax returns files of the period from 2001 to 2014. There are three measured of the tax reform effects on inter vivos gifts: the probability of making gifts, the number of times of making gifts and the annual amount of giving. Accordingly, the study uses Probit model, Wilcoxon signed-rank test and Difference-in-Differences estimation to provide empirical evidence on the effects of the reform. The results show that the reform had significantly changed individual decisions; it contributed to increases in inter vivos giving, as measured by the probability, the number of times and the annual amount of giving, in particular decedents whose net wealth are valued higher. 　　Finally, the result of this study suggests that, reform or not, the current tax law induces distortions between inter vivos gift and bequest. On the distribution of wealth, since individuals with more wealth are more likely to give and/or giving more, the 2009 reform had negative effects on equity. The important lesson to be learned from the 2009 experience is that governments should take into account that how tax reforms change individuals’ decisions; results from other-things-being-equal estimations can lead to a poor policy guidance.