Download or read book Capital Income Taxation with Portfolio Choice written by Ivo Bakota and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Capital Income Taxation and International Portfolio Choice written by Ingrid M. Werner and published by . This book was released on 1990 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Risk Taking and Optimal Taxation with Nontradable Human Capital written by Zuliu Hu and published by International Monetary Fund. This book was released on 1992-12-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: What are the effects of taxation on individual/entrepreneurs’ risk-taking behavior? This paper re-examines this old question in a continuous time life-cycle model. We demonstrate that the stream of uncertain income from human capital has systematic effects on demand for the risky physical capital asset. If labor supply is inelastic and real wages are known with certainty, then a labor income tax will reduce holdings of the risky physical asset. However, if there are random fluctuations in labor income, then the effect depends on the nature of interaction between wage risk and investment income risk. A labor income tax may actually raise demand for the risky capital asset if human capital risk and physical capital risk are positively correlated. The idiosyncratic risk and nontradability of human capital also have implications for optimal taxation. When the insurance and disincentive effects are jointly taken into account, a Pareto efficient tax structure implies a strictly positive tax rate.

Download or read book Capital Income Taxation and Risk taking in a Small Open Economy written by Patrick K. Asea and published by . This book was released on 1997 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: How do capital income taxes affect household portfolio choice and growth? We" approach this question within the context of a stochastic model of a small open economy in" which taxes on income from domestic capital (equity) and foreign bonds affect household" portfolio choice, welfare and the growth rate of the economy. The theoretical and numerical" analysis demonstrates the important role that risk plays in determining the mean and variability" of growth as well as the conditions under which a higher tax rate can be welfare improving. To" shed more light on the complex theoretical interaction between taxes and risk-taking we estimate" a reduced-form multinomial probit model of household portfolio choice using the method of" simulated moments. The empirical evidence is in stark contrast to the conventional wisdom " we find that higher taxes make it less likely that the household will hold risky assets."

Download or read book Progressivity of Capital Gains Taxation with Optimal Portfolio Selection written by Michael Haliassos and published by . This book was released on 1993 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 the treatment of capital gains, We find that reforms comprising reductions in the capital gains tax rate offset by increases in the tax rate on other investment income are efficiency reducing. Surprisingly, we find that for taxpayers for whom loss limits are not binding a switch to accrual taxation is also efficiency reducing. For those taxpayers for whom loss limits are potentially binding, we find that large efficiency gains can be achieved by increasing the amount of capital losses that may be deducted against ordinary income. These results are partly attributable to changes in risk-sharing encompassed in these reforms.

Download or read book Taxation and Portfolio Structure written by James M. Poterba and published by . This book was released on 2001 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Overview of how taxation affects household portfolio structure. It begins by outlining six aspects of portfolio behavior that may be influenced by the tax system. These are asset selection, asset allocation, borrowing, asset location in taxable and tax-deferred accounts, asset turnover, and whether to hold assets directly or through financial intermediaries. The analysis considers how ignoring tax considerations may bias estimates of how other variables, such as income or net worth, affect the structure of household portfolios. The paper then describes the tax rules that apply to various portfolio instruments in a range of major industrialized nations. This illustrates the wide variation in the potential impact of tax rules on portfolio choice. Finally, the paper selectively reviews the existing evidence on how taxation affects portfolio choice. A small but growing literature, primarily based on the analysis of U.S. data, suggests that taxes have important effects on several aspects of portfolio choice. There remain a number of decisions, however, for which it appears difficult to reconcile household choices with tax-efficient behavior.

Download or read book Capital Income Taxation Under Full Loss Offset Provisions of a Prospect Theory Investor written by Jaroslava Hlouskova and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In thi s paper we examine capital income taxation of a reference dependent sufficiently loss averse investor in a two period portfolio choice model under full loss offset provisions. Capital income taxation with loss offset provisions has been found to stimulate risk taking in expected utility models under certain assumptions about attitudes towards risk but would such effect be found under prospect theory type of preferences? We observe that the impact of capital income taxation depends on investors’ reference levels relative to their endowment income and thus we explore capital income taxation for different types of loss averse investors in terms of their ambition. We consider the less ambitious investors to be the ones with relatively low reference levels (they avoid relative losses in both periods) and more ambitious investors to be those with relatively high reference levels. We analyze two types of more ambitious investors: investors with higher time preference (who experience relative losses only in the second period under the bad state of nature) and investors with lower time preference (who experience relative losses only in the first period). We observe that capital income taxation stimulates current consumption in most cases which encourages risk taking, although the final outcome would depend on the investors’ degree of risk aversion, the rate of time preference and the tax rate in relation to certain thresholds. Current consumption could be discouraged for some ambitious type of investors that have relatively high second period reference levels but not necessary first period reference levels. In summary, to determine the impact of capital income taxation on the decision variables the reference levels in relation to endowment income play the most significant role. Ignoring reference depended preferences can lead to different conclusions for investors reaction to capital income taxation. We also find certain type of investors whose happiness level increases with capital income taxation under full loss offset provisions.

Download or read book Capital Gains Minimal Taxes written by Kaye A. Thomas and published by Fairmark Press Inc.. This book was released on 2004 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt: A complete, authoritative guide to taxation of stocks, mutual funds and market-traded stock options.

Download or read book Taxation Portfolio Choice and Asset Returns written by Clemens Sialm and published by . This book was released on 2001 with total page 324 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Equivalence of the Social Security s Trust Fund Portfolio Allocation and Capital Income Tax Policy written by Kent A. Smetters and published by . This book was released on 2001 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proves that the stock-bond portfolio choice of the Social Security trust fund is equivalent in general equilibrium to the tax treatment of capital income by the non-social security part of government. A larger [smaller] share of social security's portfolio invested in stocks is equivalent to a larger [smaller] symmetric linear tax on risky capital income returns received on assets held by private agents. This general-equilibrium equivalency holds despite the fact that the stock-bond portfolio choice is not neutral in the presence of several market frictions. These frictions include incomplete markets between generations as well as the presence of endogenously binding borrowing constraints within generations. To the extent that trust fund investment in equities is used to improve market efficiency in the context of these frictions, the equivalent capital income tax rate can be interpreted as a Lindahl tax. This tax gives a decentralized way of achieving the same command-economy outcome that would occur if the government directly controlled part of the capital stock. General-equilibrium simulation results, using a new overlapping-generations model with aggregate uncertainty, suggest that investing the entire US Social Security trust fund in equities is equivalent to increasing the capital income tax rate by about 4 percentage points.

Download or read book Taxing Portfolio Income in Global Financial Markets written by Doron Herman and published by IBFD. This book was released on 2002 with total page 503 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Personal Taxation Portfolio Choice and The Effect of the Corporation Income Tax written by Martin Feldstein and published by . This book was released on 1980 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extending the traditional treatment of the corporate tax to an economy with a progressive personal tax fundamentally changes the analysis. While the corporate tax system (CTS) does increase the total tax rate on corporate source income for some investors, the exclusion of retained earnings implies that the CTS lowers the tax rate for high-income investors. Analyzing such an economy requires replacing the traditional "equal-yield" equilibrium condition with a more general portfolio balance model. In this model, introducing a CTS can actually increase the corporate share of the capital stock even though the relative tax rate on corporate income rises.

Download or read book On Capital Formation and the Effects of Capital Income Taxation written by Ragnar Lindgren and published by . This book was released on 1985 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Portfolio Choice Under Realization based Capital Gains Taxation written by Martin Henze and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Portfolio Selection with Multiple Assets and Capital Gains Taxes written by Lorenzo Garlappi and published by . This book was released on 2001 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the portfolio choice of an investor who can invest in tow risky assets (in addition to a riskless asset) and who is subject to taxes on realized capital gains. These taxes appear in the portfolio choice problem as a form of time-independent, endogenous transaction costs. Similar to the case of portfolio choice with transaction costs, the optimal strategy of the taxable investor contains a quot;no tradequot; region originating from the excercise of the option to defer capital gains taxes. This may lead an investor to hold a markedly undiversified portfolio, for reasonable parameter values. With multiple risky assets the investor is effectively holding a portfolio of tax-deferral options. The value of these options is considerable, in the range of 5-10% of the wealth of an investor with constant relative risk aversion. Such value is decreasing in the volatility and correlation of the assets and in the risk aversion. If the risky assets can be held only through a mutual fund, the investor incurs a cost due to the loss of flexibility whose magnitude is small when assets re positively correlated but can increase considerably as the correlation decreases.

Download or read book The Taxation of Income from Capital written by Arnold C. Harberger and published by . This book was released on 1969 with total page 372 pages. Available in PDF, EPUB and Kindle. Book excerpt: Compilation of papers on problems of income taxation and the effects thereof on capital gains in the USA - covers economic implications, legal aspects of the tax system, fiscal policy, long term pattern of financing of enterprises, the effects of income taxation on labour force supply, etc., and includes statistical tables and information on personal income and investment. References.

Download or read book Personal Taxation Portfolio Choice and the Effect of the Corporation Income Tax written by Martin S. Feldstein and published by . This book was released on 2010 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extending the traditional treatment of the corporate tax to an economy with a progressive personal tax fundamentally changes the analysis. While the corporate tax system (CTS) does increase the total tax rate on corporate source income for some investors, the exclusion of retained earnings implies that the CTS lowers the tax rate for high-income investors. Analyzing such an economy requires replacing the traditional quot;equal-yieldquot; equilibrium condition with a more general portfolio balance model. In this model, introducing a CTS can actually increase the corporate share of the capital stock even though the relative tax rate on corporate income rises.