TY  - JOUR
AU  - Poterba,James M.
TI  - Taxation, Risk-Taking, and Household Portfolio Behavior
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8340
PY  - 2001
Y2  - June 2001
UR  - http://www.nber.org/papers/w8340
L1  - http://www.nber.org/papers/w8340.pdf
N1  - Author contact info:
James M. Poterba
Department of Economics
MIT, E52-350
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org
AB  - This paper summarizes the current state of research on how taxation affects household decisions with respect to portfolio structure and asset trading. It discusses long-standing issues, such as the impact of differential taxation of income flows from stocks and bonds on the incentives for households to invest in these assets, and the effect of capital gains taxation on asset sales. It also addresses a range of emerging issues, such as the impact of taxation on the behavior of mutual funds and their investors, and the effect of tax changes and tax uncertainty on investor behavior. It concludes that taxation exerts a systematic influence on the nature of risk-taking and the structure of household portfolios. Research on the effects of taxation on portfolio structure is more advanced than work on the welfare costs of portfolio distortions.
ER  -