New evidence on taxes and portfolio choice
Sule Alan,
Kadir Atalay,
Thomas Crossley () and
Sung-Hee Jeon
Journal of Public Economics, 2010, vol. 94, issue 11-12, 813-823
Abstract:
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.
Keywords: Household; portfolio; choice; Taxes (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047-2727(10)00119-2
Full text for ScienceDirect subscribers only
Related works:
Working Paper: New evidence on taxes and portfolio choice (2009) 
Working Paper: New Evidence on Taxes and Portfolio Choice (2009) 
Working Paper: New Evidence on Taxes and Portfolio Choice (2009) 
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:eee:pubeco:v:94:y:2010:i:11-12:p:813-823
Access Statistics for this article
Journal of Public Economics is currently edited by R. Boadway and J. Poterba
More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().