How Do Taxes Affect Investors’ Stock Market Realizations?

Evidence from Tax-Return Panel Data

Authors

  • H. Nejat Seyhun University of Michigan
  • Douglas J. Skinner University of Michigan

DOI:

https://doi.org/10.1016/1057-0810(95)90045-4

Abstract

This article provides direct evidence on the empirical importance of tax-reduction strategies. Our results indicate that relatively few investors trade securities to reduce their taxes and that tax-induced trading has little effect on stock prices. Our 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. The Journal of Business, April 1994, 67(2): 231-262. (Reprinted with permission of The Journal of Business.)

Published

1995-06-30

How to Cite

Seyhun , H. N., & Skinner , D. J. (1995). How Do Taxes Affect Investors’ Stock Market Realizations? : Evidence from Tax-Return Panel Data. Financial Services Review, 4(1), 70. https://doi.org/10.1016/1057-0810(95)90045-4

Issue

Vol. 4 No. 1 (1995): Financial Services Review

Section

Abstracts of Articles on Individual Financial Management

License

Copyright (c) 1995 JAI Press Inc.

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