Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70915
Authors: 
Massarrat-Mashhadi, Nima
Year of Publication: 
2013
Series/Report no.: 
School of Business & Economics, Discussion Paper: FACTS, Freie Universität Berlin 2013/1
Abstract: 
Does the timing of labour earnings taxation encroaches upon capital income taxation and individual risk-taking investment decisions, i.e. portfolio selection? This paper presents the results of a laboratory experiment that is, contrary to previous approaches, not restricted to the analysis of capital income taxation (fully taxable vs. tax-exempt investment earnings) and individual risktaking, but adds other dimensions of taxation, i.e. deferral or immediate labour earnings taxation. Empirical findings support the view that tax framing effects affect tax burden visibility, changing individuals' risk-taking propensity substantially. A tax system applying deferral taxation of labour earnings turns out to be more attractive to taxpayers with regard to risk-taking investment than immediate labour taxation with tax-exempt earnings from investment.
Subjects: 
deferral labour taxation
capital income taxation
experimental tax research
retirement accounts
JEL: 
C91
H24
H31
Document Type: 
Working Paper

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