THE EFFECTS OF PROGRESSIVE AND PROPORTIONAL INCOME TAXATION ON RISK-TAKING
- 1 March 1980
- journal article
- Published by University of Chicago Press in National Tax Journal
- Vol. 33 (1) , 67-75
- https://doi.org/10.1086/ntj41862284
Abstract
Progressive income taxation may favor, or hinder, risky investments. The effects of any progressive tax on risk-taking, can only be described if the investor's utility function is known up to a positive linear transformation. The effects of proportional income taxation cannot be predicted unambiguously, if there are differences between taxable income and economic income. Neither the statement that progressive taxation decreases the demand for risky assets nor the call for a lower tax rate on capital gains to stimulate investment and risk-taking seem to be justified.Keywords
This publication has 0 references indexed in Scilit: