Abstract
The purpose of this paper is to study whether investors’ willingness to realize capital gains falls when the marginal tax rate on capital gains is raised. We use a rich register-based panel data set covering almost 8% of the Swedish population. The results indicate that a 10% increase in capital gains tax rate reduces the number of realizations of capital gains with 8.7% and the realized amount, given the decision to realize, with 1.9%. In addition, we find that wealthy individuals seem to respond more to changes in capital gains tax rates than less-wealthy.
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Daunfeldt, SO., Praski-Ståhlgren, U. & Rudholm, N. Do high taxes lock-in capital gains? Evidence from a dual income tax system. Public Choice 145, 25–38 (2010). https://doi.org/10.1007/s11127-009-9526-8
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DOI: https://doi.org/10.1007/s11127-009-9526-8