TY  - JOUR
AU  - Auerbach,Alan J.
AU  - Siegel,Jonathan M.
TI  - Capital Gains Realizations of the Rich and Sophisticated
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7532
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7532
L1  - http://www.nber.org/papers/w7532.pdf
N1  - Author contact info:
Alan J. Auerbach
Department of Economics
530 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu

Jonathan M. Siegel
Office of Tax Analysis
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Tel: 202/622-6241
E-Mail: jonathan.siegel@do.treas.gov
AB  - This paper attempts to bring theoretical and empirical research on capital gains realization behavior closer together by considering whether investors who appear to engage more in strategic tax avoidance activity also respond differently to tax rates.  We find that such investors exhibit significantly smaller responses to permanent tax rate changes than other investors. Put another way, a larger part of their response to capital gains tax rates reflects timing, consistent with their closer adherence to tax avoidance strategies emphasizing arbitrage based on tax rate differentials.  This finding holds for two alternative specifications of realization behavior, one of which suggests larger permanent responses to capital gains tax rates than those of previous panel studies.
ER  -