Capital Gains Tax Realizations and Tax Rates: New Evidence From Times Series
Using data from the 1986 through 1997 period, we update the time series evidence on the response of capital gains realizations to tax rates. <p> We find higher long-run elasticities than reported in many previous studies, but the estimates decrease substantially when the influence of 1986 is effectively removed. <p> We explore several explanations for a diminished behavioral response in the period following fundamental tax reform, finding some suggestive evidence that the response may be dulled in part by a succession of rate changes in a relatively short period and the increasing role of mutual funds in households' portfolios.
Authors: | Eichner, Matthew ; Sinai, Todd |
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Institutions: | Samuel Zell and Robert Lurie Real Estate Center, Wharton School of Business |
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