Do Tax Sensitive Investors Liquidate Appreciated Shares After a Capital Gains Tax Rate Reduction?
James A. Chyz and
Oliver Zhen Li
National Tax Journal, 2012, vol. 65, issue 3, 595-627
Abstract:
Using data on institutional investors’ portfolio composition before and after the capital gains tax rate cut in the Taxpayer Relief Act of 1997, we find evidence that, relative to less tax sensitive institutional investors, tax sensitive institutional investors are more willing to sell appreciated equity in response to the rate cut. Further, the reduction in value invested in appreciated equity appears to be lasting, consistent with the tax rate cut lowering tax sensitive investors’ impediments to optimally balancing their portfolios. These results provide direct evidence of a capital gains tax lock-in effect.
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://doi.org/10.17310/ntj.2012.3.04 (application/pdf)
https://doi.org/10.17310/ntj.2012.3.04 (text/html)
Access is restricted to subscribers and members of the National Tax Association.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:65:y:2012:i:3:p:595-627
Access Statistics for this article
National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry
More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().