Economics at your fingertips  

Investor asset valuation under a wealth tax and a capital income tax

Petter Bjerksund () and Guttorm Schjelderup ()
Additional contact information
Petter Bjerksund: Norwegian School of Economics and Norwegian Centre for Taxation
Guttorm Schjelderup: Norwegian School of Economics, and Norwegian Centre for Taxation and CESifo

International Tax and Public Finance, 2022, vol. 29, issue 4, No 3, 873-889

Abstract: Abstract We study how a capital income tax and a wealth tax affect an investor's valuation of a company's stock in an efficient international capital market. Using a one-period model, a model of infinite horizon where the asset generates a future cash flow that is a martingale, and a finite horizon model where we abandon the martingale assumption, we find that a wealth tax and/or a capital income tax do not lead investors to value an investment differently from untaxed investors. Investors who seek a higher pre-tax rate of return due to capital taxes harm their own wealth.

Keywords: Wealth tax; Capital income tax; Rate of return; Investment decisions; Domestic and foreign assets (search for similar items in EconPapers)
JEL-codes: G11 G15 H24 H30 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

DOI: 10.1007/s10797-021-09691-0

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-07-23
Handle: RePEc:kap:itaxpf:v:29:y:2022:i:4:d:10.1007_s10797-021-09691-0