This paper analyzes how a wealth tax affects investor portfolio choice when a realization-based capital gains tax is present. We develop a two-period model with heterogeneous investors and show that while a capital gains tax distorts portfolio choice by encouraging investors to postpone...

Recent proposals to tax unrealized capital gains or wealth have sparked a debate about their impact on entrepreneurship. We show that accrual-based taxation creates two opposing effects: successful founders face greater dilution from advance tax payments, whereas unsuccessful founders receive...

Standard optimal capital tax theory abstracts from modeling asset prices, making it unsuitable for thinking about capital gains and wealth taxation. We study optimal redistributive taxation in an environment with asset price movements, adopting the modern finance view that asset prices fluctuate...

We show that high-income buyers earn higher capital gains on housing using detailed transaction data from Denmark. Geographic location statistically accounts for nearly all the difference, with little role for aggregate market timing, property type, or other buyer characteristics. This finding...

We compare wealth taxes and capital gains taxes in a random growth model with idiosyncratic investment risk. At equal tax revenue, wealth taxes generate higher wealth inequality but also higher wealth mobility than capital gains taxes. The mechanism operates through variance: wealth taxes shift...

The study examines the shift in taxation of open-ended fixed-income funds in Brazil from a realization basis to an accrual basis (locally known as come-cotas), which was introduced in 1998 and more recently extended to include private closed-end funds and offshore trusts through the enactment of...

This paper analyzes how a wealth tax affects investor portfolio choice when a realization-based capital gains tax is present. We develop a two-period model with heterogeneous investors and show that while a capital gains tax distorts portfolio choice by encouraging investors to postpone...

Recent proposals to tax unrealized capital gains or wealth have sparked a debate about their impact on entrepreneurship. We show that accrual-based taxation creates two opposing effects: successful founders face greater dilution from advance tax payments, whereas unsuccessful founders receive...

This working paper examines how individuals morally, ethically, and emotionally evaluate extreme wealth disparities in their countries. Using cross-sectional data from the 2019 International Social Survey Programme (ISSP) Social Inequality V module, I compare two groups of EU countries with...

In the United States, exchange-traded funds can defer capital gains taxes of their investors by taking advantage of a legal loophole. To quantify the impact of this tax loophole on investor portfolios, we study a rank-dependent expected utility model. We develop an approximation formula for the...

This paper shows that a transaction tax makes trades in decentralized markets more information sensitive and enlarges the range of information costs for which the equilibrium exhibits private information acquisition and endogenous adverse selection. A transaction tax reduces the probability of...

Investors with taxable portfolios sometimes delay the sale of appreciated stock to defer capital gains taxes. While this strategy does help to reduce taxes, it can cause the portfolio to become more concentrated over time, leading to higher overall volatility and lower long-term returns. This...

This study delves into the financial strategies of Italian Serie A football clubs, focusing on the relationship between revenues obtained through the sale of players' tags and those from broadcasting and media rights. Using Resource Dependence Theory (RDT) as lens, this research aims to...

Using panel data on a 20% random sample of Canadian taxpayers, we study behavioral responses to the cancellation of a lifetime capital gains exemption that resulted in increased capital gains taxation for some individuals. The unique setting allows us to distinguish between short-term avoidance...

The European Union needs to raise significant resources to finance a just green transition. At the same time, there is a widespread fiscal regressivity in many EU countries. Indeed, recent empirical evidence shows that the tax systems of many EU members are characterized by low degrees of...

In this essay, Gamage and Walczak share their opening statements in their debate over Quinn v. Washington, the recent Washington Supreme Court decision upholding a state tax on capital gains as an excise tax

Prior studies of the relevance of long-term capital gains for stock prices rely on the evidence from the 1997 tax cut in the U.S. The key component of the tax-sensitive ownership in these studies is individual ownership; its average is reported to be as high as 66.7%. The sharp increase in...

The Korean government decided, in 2016, to introduce a capital gains tax (CGT) on Kospi derivatives, both to secure tax revenue and to restrict speculative trading. We take advantage of a delay between the taxation of Kospi and Mini-Kospi derivatives to apply Difference-in-Differences to assess...

The European Union needs to raise significant resources to finance a just green transition. At the same time, there is a widespread fiscal regressivity in many EU countries. Indeed, recent empirical evidence shows that the tax systems of many EU members are characterized by low degrees of...

We analyze a multi-period model of capital gains taxation with endogenous prices. Relative to an economy without taxation, a capital gains tax tends to lower prices and increase returns. Abstracting from tax redistribution policies, we find that a taxable investor's welfare falls, a nontaxable...

Co-investment, often seen as a remedy for agency problems, may incentivize managers to cater to own preferences. We provide evidence that mutual fund managers with considerable co-investment stakes alter risk-taking decisions to prioritize their own tax interests. By exploiting the enactment of...

Tax incentives favouring homeownership are widely used in developed economies. Homeownership is often thought to bring a number of positive contributions, from the promotion of households' saving to enhanced community engagement. However, housing tax incentives are also considered as a major...

Recent proposals to tax unrealized capital gains or wealth have sparked a debate about their impact on entrepreneurship. We show that accrual-based taxation creates two opposing effects: successful founders face greater dilution from advance tax payments, whereas unsuccessful founders receive...