Tax rates have fluctuated considerably since federal income taxes were introduced in the United States in 1913. This paper analyzes the effects of stochastic taxation on asset prices in a dynamic general equilibrium model. Stochastic taxation affects the after-tax returns of both risky and safe...

This article suggests that holding period requirements are an inappropriate method to curb speculation. If the stock market is rational, holding period requirements distort investment decisions and decrease social welfare by causing security prices to depart from their fundamental values. If, on...