How Do Taxes Affect Investors' Stock Market Realizations? Evidence from Tax-Return Panel Data

H Nejat Seyhun and Douglas J Skinner

The Journal of Business, 1994, vol. 67, issue 2, 231-62

Abstract: This article provides direct evidence on the empirical importance of tax-reduction strategies. The authors' results indicate that relatively few investors trade securities to reduce their taxes and that tax-induced trading has little effect on stock prices. Their findings suggest that, holding all else constant, stock prices are likely to be insensitive to the difference between short- and long-term capital gains tax rates. Copyright 1994 by University of Chicago Press.

Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:67:y:1994:i:2:p:231-62

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