Jonathan M. Siegel
Office of Tax Analysis
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
E-Mail: no email available
NBER Working Papers and Publications
|February 2000||Capital Gains Realizations of the Rich and Sophisticated|
with Alan J. Auerbach: w7532
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.
Published: Auerbach, Alan J. and Jonathan M. Siegel. "Capital Gains Realizations Of The Rich And Sophisticated," American Economic Review, 2000, v90(2,May), 276-282. citation courtesy of
|February 1998||Capital Gains Taxation and Tax Avoidance: New Evidence from Panel Data|
with Alan J. Auerbach, Leonard E. Burman: w6399
Previous theoretical analyses of the capital gains tax have suggested that investors have considerable opportunity to avoid the tax. Yet, past empirical work has found relatively little evidence of such activity. Using a previously unavailable panel data set with a very large sample of high-income individuals, this paper aims to bring the theory and evidence closer together by examining the behavior of individual taxpayers over time. Though confirming past findings that avoidance of tax on realized capital gains is not prevalent, we do observe that tax avoidance activity increased after the passage of the Tax Reform Act of 1986, and that high-income, high-wealth and more sophisticated taxpayers were most likely to avoid tax. However, the efficacy of tax avoidance strategies depends on b...
Published: Slemrod, J. (ed.) Does Atlas Shrug? The Economic Consequences of Taxing the Rich. Cambridge: Harvard University Press, 2002.