NCPA Tax Policy - Urban Inst. Study: Capital Gains Not Sheltered

Tax Policy

Urban Inst. Study: Capital Gains Not Sheltered (SUMMARY)

Researchers at the Urban Institute were surprised to find that wealthy Americans are not using gimmicks or loopholes to lower their tax bills. In a recent study, they found that the capital gains tax, in particular, was a good deal harder to avoid than commonly supposed.

From 1985 to 1994, only about 12 percent of taxpayers on average fully sheltered realized capital gains, while 56 percent sheltered none.
Another 11 percent offset less than a tenth of their capital gains.
When all gains were included, only a little over 6 percent were fully offset by losses -- with 38.6 percent being fully taxed.

While some taxpayers may have been able to offset their gains with losses for a year or two, in only a handful of the 13,000 returns studied were offsets used to avoid capital gains taxes year after year.
Source: Alan J. Auerbach, et al., "Capital Gains Taxation and Tax Avoidance: New Evidence from Panel Data," December 1997, Urban Institute, 2100 M Street, N.W., Washington, D.C. 20037, (202) 833-7200.

Home | Support Us | All Issues | Social Security | Debate Central | Contact Us
Dallas Headquarters: 12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
Washington Office: 601 Pennsylvania Avenue NW, Suite 900 South Building, Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
© 2001 NCPA