Research Repository

New evidence on taxes and portfolio choice

Alan, S and Atalay, K and Crossley, TF and Jeon, SH (2010) New evidence on taxes and portfolio choice. [UNSPECIFIED]

Full text not available from this repository.


Identifying the effect of differential taxation on portfolio allocation requires exogenous variation in marginal tax rates. Marginal tax rates vary with income, but income surely affects portfolio choice directly. In systems of individual taxation - like Canada's - couples with the same household income can face different effective tax rates on capital income when labor income is distributed differently within households. Using this source of variation we find portfolio responses to taxation among more affluent households. The estimated effects are statistically significant but economically modest. In a "placebo" test, using data from the U.S. (which has joint taxation), we find no effect of the intra-household distribution of labor income on portfolios. © 2010 Elsevier B.V.

Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 04 Sep 2013 09:35
Last Modified: 04 Feb 2019 11:16

Actions (login required)

View Item View Item