Retrospective Capital Gains Taxation in a Dynamic Stochastic World
AbstractWe analyze Auerbach´s (1991) proposal of a retrospective capital gains tax, which is equivalent to an accrual tax on an ex ante basis. Using a continuous-time model with stochastic interest rates and serially correlated asset returns, we prove that such an equivalence still holds. This means that in a more realistic setting the realization-based system requires no ad hoc adjustment for equivalence to hold.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 66 (2010)
Issue (Month): 3 (September)
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