When corporate payout is taxed, internal equity (retained earnings) is cheaper than external equity (share issues). If there are no perfect substitutes for equity finance, payout taxes may therefore have an effect on the investment of firms. High taxes will favor investment by firms who can...

This article analyses heterogeneity in capital gains tax elasticities across individuals. Using panel data of over 260 000 individuals, I find that the sensitivity of capital gains to taxes is decreasing over the individual life cycle. Younger individuals respond more strongly to changes in...

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...