School of Economics and Business Administration
Goethe University Frankfurt
Theodor-W,-Adorno-Platz 3, PF H32
60323 Frankfurt am Main
Institutional Affiliation: Goethe University Frankfurt
Information about this author at RePEc
NBER Working Papers and Publications
|January 1993||Progressivity of Capital Gains Taxation with Optimal Portfolio Selection|
with Andrew B. Lyon: w4253
We provide new data on capital gains realizations using a five-year stratified panel of taxpayers covering 1985-1989. We find, as earlier studies have, that capital gains realizations are very concentrated among the highest income groups. We use these data and data from the Federal Reserve Board Survey of Consumer Finances to draw inferences from a simulation model of the effects on progressivity and efficiency of alternative tax treatment of capital gains. Tax payments alone are not an accurate indication of the burden of a tax. Taxes generally create costs beyond the dollar value collected by causing persons to change their behavior to avoid the tax. Risk is also affected by the tax system. Beneficial risk-sharing characteristics of the tax system are frequently overlooked when examining...
Published: Slemrod, Joel (ed.) Tax progressivity and income inequality. Cambridge; New York and Melbourne: Cambridge University Press, 1994.