National Tax Journal

Heterogeneity in the Tax Responses of Personal Capital Gains Realizations

Tim Dowd, Robert McClelland, and Athiphat Muthitacharoen

65 National Tax Journal 827-40 (December 2012)


This article investigates the heterogeneity in the tax elasticities of personal capital gains realizations. We first examine the skewed nature of both capital gains assets ownership and their realizations. We then briefly review earlier studies, including Dowd, McClelland, and Muthitacharoen (2012). Although not chosen for this purpose, the semi-log specification used in that study allows us to explore variation in elasticity estimates across taxpayers. Finally, we focus on variation in tax responses among different assets. The elasticities of corporate stock and mutual funds are lower than our overall elasticity, while the elasticity of bonds is greater.

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