Capital gains taxes and the realization of capital gains and losses. Evidence from German income tax data
This paper analyzes the influence of capital gains taxation on the decision to realize capital gains and losses when gains are tax-exempt after a certain holding period. Theory predicts that high marginal tax rates incentivize investors to realize taxable losses. In contrast, the propensity to reali...
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| Formato: | artículo |
| Fecha de publicación: | 2013 |
| País: | España |
| Recursos: | Universidad de Navarra |
| Repositorio: | Dadun. Depósito Académico Digital de la Universidad de Navarra |
| Idioma: | inglés |
| OAI Identifier: | oai:dadun.unav.edu:10171/120187 |
| Acesso em linha: | https://hdl.handle.net/10171/120187 |
| Access Level: | acceso abierto |
| Palavra-chave: | Capital gains taxation Capital losses Capital gains Income tax Lock-in effect |
| Resumo: | This paper analyzes the influence of capital gains taxation on the decision to realize capital gains and losses when gains are tax-exempt after a certain holding period. Theory predicts that high marginal tax rates incentivize investors to realize taxable losses. In contrast, the propensity to realize taxable short-term capital gains decreases in the marginal tax rate. Using two stratified 10% random samples of all German income tax declarations filed in 2001 and 2004, the paper provides robust evidence for this prediction. The marginal tax rate has a significant and positive (negative) effect on the investor's propensity to realize capital losses (gains). |
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