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Capital Gains Taxation And Stock Market Investments: Empirical Evidence

Author

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  • Akinloye Akindayomi

Abstract

The objective of this study is to examine stock market investments responses to changes in capital gains tax rate. A priori, rational taxpayers are expected to respond to changes in this tax rate. For example, a reduction (increase) in capital gains tax rates may make taxpayers to unlock (lock-in) substantial amounts of accrued (realizable) appreciated gains. The findings of this study however reveal that capital gains realization and not capital gains tax rates impacts stock market investments in the U.S.

Suggested Citation

  • Akinloye Akindayomi, 2013. "Capital Gains Taxation And Stock Market Investments: Empirical Evidence," Accounting & Taxation, The Institute for Business and Finance Research, vol. 5(2), pages 1-12.
    • Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:1-12
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    References listed on IDEAS

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    Cited by:

    1. Tomislav Globan & Tihana Skrinjaric, 2020. "Penny wise and pound foolish: capital gains tax and trading volume on the Zagreb Stock Exchange," Public Sector Economics, Institute of Public Finance, vol. 44(3), pages 299-329.

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    More about this item

    Keywords

    Stock Market Investment; Capital Gains Tax Rates; Realized Capital Gains;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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