On the Role of Intangible Information and Capital Gains Taxes in Long-Term Return Reversals

2013 ◽  
Author(s):  
Ajay Bhootra
Keyword(s):  
Capital Gains ◽  
Capital Gains Taxes ◽  
Intangible Information ◽  
Return Reversals

Capital Gains Taxes and the Market Response to Earnings Announcements

2019 ◽  
Vol 42 (1) ◽  
pp. 1-22
Author(s):  
Greg Clinch ◽  
Bradley P. Lindsey ◽  
William J. Moser ◽  
Mahmoud Odat
Keyword(s):  
Stock Price ◽  
Trading Volume ◽  
Public Information ◽  
Strong Support ◽  
Capital Gains ◽  
Tax Rate ◽  
Price Response ◽  
Capital Gains Taxes ◽  
Public Signal

ABSTRACT We investigate the stock price and trading volume effects of differential capital gains taxes applied to short- and long-term capital gains when firms disclose public information. We extend the theoretical framework developed in Shackelford and Verrecchia (2002) linking differential capital gains taxes to price and volume, allowing for positive and negative news and incorporating exogenous non-taxable, uninformed traders. Our model, like Shackelford and Verrecchia (2002), indicates that price responses to public information are magnified, and volume inhibited, when short-term capital gains attract a higher tax rate than long-term capital gains. However, the effects are more nuanced than those in Shackelford and Verrecchia (2002). Specifically, the degree of magnification/inhibition for price reaction and trading volume differs across well-defined regions of public signal and supply change realizations. We use actual stock price and trading data to empirically investigate these predictions. Our results provide strong support for the price response predictions.

scholarly journals Policy Watch: Cutting Capital Gains Taxes

1991 ◽  
Vol 5 (1) ◽  
pp. 181-192 ◽  
Author(s):  
Gerald E Auten ◽  
Joseph J Cordes
Keyword(s):  
Economic Performance ◽  
Tax Reform ◽  
Capital Gains ◽  
Tax Rates ◽  
Capital Gains Tax ◽  
Taxable Income ◽  
Capital Gains Taxes ◽  
Lively Debate ◽  
Policy Watch

From 1922 to 1986, long-term capital gains were taxed at lower rates than other income, generally by allowing a portion of long-term capital gains to be excluded from taxable income. While taxing capital gains at the same rates as other income has been hailed by some as a major accomplishment of tax reform, it has been criticized by others as one of its main flaws. As a result, there have been proposals each year since 1986 to restore some type of capital gains preference. These proposals have sparked a lively debate centered on three main questions: Would reducing the capital gains tax lower or raise federal revenues? Who benefits most from cutting the capital gains tax? Would lower tax rates on capital gains improve economic performance?

scholarly journals Advancing better tax policy: the role of wealth taxes in New Zealand

2016 ◽  
Vol 12 (3) ◽  
Author(s):  
Lisa Marriott
Keyword(s):  
New Zealand ◽  
Tax Policy ◽  
Oecd Countries ◽  
Capital Gains ◽  
Contributing Factors ◽  
Tax System ◽  
Unequal Treatment ◽  
Capital Gains Taxes

Most OECD countries have seen increasing gaps between the wealthy and the less wealthy in recent decades (OECD, 2008). Most OECD countries are also increasingly concerned about inequality. The measures and impacts of inequality are highlighted in a range of well-known publications (Wilkinson and Pickett, 2010; Corak, 2013; Stiglitz, 2013, 2015; Dorling, 2014; Piketty, 2014; Rashbrooke, 2014b). Suggestions for the causes of inequality are numerous and varied. While the tax system cannot directly address many of the contributing factors, wealth taxes such as capital gains taxes can assist with the unequal treatment of taxes on income and capital, and taxes such as estate duties or gift duties may help with redistribution of wealth. 

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