Capital Gains Realizations of the Rich and Sophisticated

This paper attempts to bring theoretical and empirical research on capital gains realization behavior closer together by considering whether investors who appear to engage more in strategic tax avoidance activity also respond differently to tax rates. We find that such investors exhibit significantly smaller responses to permanent tax rate changes than other investors. Put another way, a larger part of their response to capital gains tax rates reflects timing, consistent with their closer adherence to tax avoidance strategies emphasizing arbitrage based on tax rate differentials. This finding holds for two alternative specifications of realization behavior, one of which suggests larger permanent responses to capital gains tax rates than those of previous panel studies.

The Efficiency Gains from Dynamic Tax Reform

This paper presents a new simulation methodology for determining the pure efficiency gains from tax reform along the general. equilibrium rational expectations growth path of life cycle economies. The principal findings concern the effects of switching from a proportional income tax with rates similar to those in the U.S. to either a proportional tax on consumption or a proportional tax on labor income. A switch to consumption taxation generates a sustainable welfare gain of almost 2 percent of lifetime resources. In contrast, a transition to wage taxation generates a loss of greater than ? percent of lifetime re- sources. A second general result is that even a mild degree of progressivity in the income tax system imposes a very large efficiency cost.

Some Statistical Models for Prediction

This dissertation examines the use of statistical models for prediction. Examples are drawn from public policy and chosen because they represent pressing problems facing U.S. governments at the local, state, and federal level. The first five chapters provide examples where the perfunctory use of linear models, the prediction tool of choice in government, failed to produce reasonable predictions. Methodological flaws are identified, and more accurate models are proposed that draw on advances in statistics, data science, and machine learning. Chapter 1 examines skyscraper construction, where the normality assumption is violated and extreme value analysis is more appropriate. Chapters 2 and 3 examine presidential approval and voting (a leading measure of civic participation), where the non-collinearity assumption is violated and an index model is more appropriate. Chapter 4 examines changes in temperature sensitivity due to global warming, where the linearity assumption is violated and a first-hitting-time model is more appropriate. Chapter 5 examines the crime rate, where the independence assumption is violated and a block model is more appropriate. The last chapter provides an example where simple linear regression was overlooked as providing a sensible solution. Chapter 6 examines traffic fatalities, where the linear assumption provides a better predictor than the more popular non-linear probability model, logistic regression. A theoretical connection is established between the linear probability model, the influence score, and the predictivity

Coping with family structure in genome-wide association studies: a comparative evaluation

In this paper, a fully statistical investigation of the control of family structure as random effects is analyzed and discussed, using both the genome-wide association studies (GWAS) data and simulated data. Three modeling strategies are proposed and the analysis results suggest the hybrid use of results from all possible models should be combined in practice

Capital Gains Taxation and Tax Avoidance: New Evidence from Panel Data

Previous theoretical analyses of the capital gains tax have suggested that investors have considerable opportunity to avoid the tax. Yet, past empirical work has found relatively little evidence of such activity. Using a previously unavailable panel data set with a very large sample of high-income individuals, this paper aims to bring the theory and evidence closer together by examining the behavior of individual taxpayers over time. Though confirming past findings that avoidance of tax on realized capital gains is not prevalent, we do observe that tax avoidance activity increased after the passage of the Tax Reform Act of 1986, and that high-income, high-wealth and more sophisticated taxpayers were most likely to avoid tax. However, the efficacy of tax avoidance strategies depends on being able to avoid tax for long periods, and we find that most tax avoidance is of relatively short duration. Thus, the effective tax rate on realized capital gains is very close to the statutory rate in all years and tax brackets.