Capital Gains Tax Realizations and Tax Rates: New Evidence from Time Series
Posted: 6 Mar 2001
Abstract
Using data from the 1986 through 1997 period, we update the time series evidence on the response of capital gains realizations to tax rates. In general, 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. 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.
Suggested Citation: Suggested Citation
Eichner, Matthew J. and Sinai, Todd M., Capital Gains Tax Realizations and Tax Rates: New Evidence from Time Series. Available at SSRN: https://ssrn.com/abstract=240610
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