Do high taxes lock-in capital gains? Evidence from a dual income tax system

Daunfeldt, Sven‐Olov; Praski-Ståhlgren, Ulrika; Rudholm, Niklas

doi:10.1007/s11127-009-9526-8

Cited by 23 publications

(14 citation statements)

References 16 publications

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“…1985 is a reasonable choice for the start of the prereform period to ensure an almost constant capital gains tax regime for the analyses in Section 3 and 4. Demographic controls include eleven variables (see also Sodini 2009a, 2009b;Daunfeldt, Praski-Ståhlgren, and Rudholm 2010). T own t is an indicator T own is an indicator variable equal to 100 for individuals residing in towns (usually) with less than 10,000 inhabitants and equal to 0 otherwise.…”

Section: Datamentioning

confidence: 99%

“…However, this data set does not include information on individual income or demographic factors. Daunfeldt, Praski-Ståhlgren, and Rudholm (2010) use a comprehensive micro data set but lack identifying cross-sectional variation in capital gains tax rates between individuals during their sample period. Jacob (2010) uses two 10% random samples of all German income tax statements in 2001 and 2004 and shows that the propensity to realize capital losses (gains) increases (decreases) in the marginal (progressive) income tax rate on short-term capital gains.…”

Section: Introductionmentioning

confidence: 99%

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Tax Regimes and Capital Gains Realizations

Jacob

2016

European Accounting Review

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This paper analyzes the effects of progressive versus proportional taxation on capital gains realization behavior. Using a comprehensive panel of over 230,000 individuals in Sweden for , this paper shows after progressive capital gains taxes were cut from over 80% in the 1980s to a proportional tax rate of 30% in 1991, especially high-income taxpayers increased capital gains realizations. The reaction to the introduction of the proportional capital gains tax rate is more pronounced among younger individuals. This paper also shows that under a progressive (proportional) tax regime, investors with excess income are less (more) likely to realize capital gains than individuals with liquidity constraints. Hence, proportional versus progressive taxation plays an important role in capital gains realizations of private investors.

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Section: Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Tax Regimes and Capital Gains Realizations

Jacob

2016

European Accounting Review

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“…High capital gains taxation also locks in capital, making key agents less willing to realize capital gains (Auten and Cordes 1991;Daunfeldt et al 2010). Experiments have shown that taxing capital gains at a high rate may prevent investors from undertaking new investments (Meade 1990), thereby impairing HIE and HGFs.…”

Section: Taxation Of Capital Incomementioning

confidence: 99%

Taxation, Labor Market Policy and High-Impact Entrepreneurship

2010

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Public policy affects the prevalence and performance of both productive and highimpact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key actors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship. Terms of use: Documents in EconStor may

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“…For further details on the capital gains changes, see National Tax Board (2009). Recent tax incidence studies also suggest that these capital gains tax changes were of importance for realization behavior (Daunfeldt, Praski-Ståhlgren and Rudholm, 2010;Jacob, 2011 …”

mentioning

confidence: 99%