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Journal Publication

The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule

Published: May 2021
Researchers aim to understand public attitudes about the realization rule for capital gains, which requires that assets usually must be sold before gains on them are taxed and thus makes taxing capital income much harder.

Analyzing survey results, researchers reach three main conclusions. First, participants strongly preferred to wait to tax gains on stocks until sale. Second, participant opinions were not meaningfully swayed by explanations of the rule, even when those explanations revealed a large impact on an individual's outcome. Third, researchers find evidence for the main factors explaining these attitudes.

Abstract and Citation