We define a class of risk-taking-neutral (RTN) background risks. These background risks have the property that they will not alter decisions made with respect to another risk, for individuals with HARA utility. If we wish to compare a decision made with and without some exogenous background...

This paper exploits the tax rate variation generated by the Economic Growth and Tax Reconciliation Act of 2001 (which reduced ordinary income tax rates) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (which reduced capital gains and dividend tax rates) to estimate the effect of...