Capital Gain Research Papers - Academia.edu (original) (raw)

2025

This paper uses a general equilibrium model to simulate both the effects of a preferential capital-gains tax rate on total income tax revenues and the effects of a revenue-neutral substitution between a capital gains preference and marginal income tax rates on economic efficiency and the distribution of income. In the simulations, a capital gains preference increases efficiency by reducing tax distortions between untaxed assets (household and state and local capital) and taxable business sector assets and between realized and unrealized capital gains (the "lock-in" effect), but reduces efficiency by increasing tax distortions between corporate dividends and retained earnings and between financial assets that produce capital gain income and those that produce ordinary income. Because the model treats aggregate factor supplies as fixed, however, the simulations do not capture the efficiency gain from reducing the tax distortion between current and future consumption or the loss from increasing the tax distortion between current consumption and leisure (or untaxed labor). '.3

2025

This study investigates the estimated cost of tax compliance for SMEs in Nigeria. The sum of internal compliance cost, external compliance cost and incidental cost; including bribery/psychological cost related to the different taxes paid by SMEs in Nigeria was utilized in estimating the tax compliance costs. Our analyses revealed that on the average the SMEs overall tax compliance cost in Nigeria is about N 108,594 per annum and the values range from N14, 500 to N725, 000 per annum. Smaller SMEs were found to have an average TCC of N219,601 per annum as against N123,047 TCC per annum for larger SMEs which implies the existence of tax compliance costs regressivity in Nigeria. It was also discovered that Value Added Tax (VAT) has the highest TCC accounting for about 33% of the total average tax compliance costs. Furthermore, the study shows that SMEs in manufacturing industry have the highest relative average tax compliance cost while those in business services have the lowest average...

2025, RePEc: Research Papers in Economics

The Center's mission is to produce first-class research and forge a strong link between the academic community and decision makers in the public and private sectors around an issue of critical importance to the nation's future. To achieve this mission, the Center sponsors a wide variety of research projects, transmits new findings to a broad audience, trains new scholars, and broadens access to valuable data sources.

2025, Washington, DC: The Urban Institute. …

We use 1998-2006 waves of the Health and Retirement Study (HRS) to investigate how households change their asset holdings at older ages. We find a notable increase in the net worth of older households between 1996 and 2006, with most of... more

2025

El objetivo de este trabajo es desarrollar una metodología para construir series estadísticas consistentes nominales y reales sobre las compras, el consumo y el stock de bienes de consumo durables para la economía chilena en el periodo 1981-1999 con frecuencias anual y trimestral. Adicionalmente, el trabajo explora las diferencias entre este tipo de consumo y aquel de bienes no durables en términos su comportamiento cíclico, su tendencia de largo plazo y de la correlación que exhiben sus shocks con respecto a las principales variables macroeconómicas.

2025, The 10th IFA International ConferenceConference

This study investigates the concept of the Dividend Trap, a situation where investors are lured by high dividend yields only to suffer losses due to subsequent stock price declines. This research introduce the Dividend Trap Score, a practical tool for identifying potential dividend traps in stocks, and apply this tool to companies listed in the IDX High Dividend 20. Our findings reveal key indicators that can signal a potential dividend trap, offering valuable insights for both investors and traders. The study concludes with recommendations on how to mitigate the risks associated with dividend traps.

2025

Cet article discute de ce que l'on appelle l'effet de blocage tel que perçu par un investisseur en Bourse. L'article présente deux formules utilisées pour déterminer le taux de rentabilité actuariel d'un placement, c'est-à-dire le taux de rentabilité pour lequel un investisseur est indifférent entre conserver un actif ou le remplacer par un autre. Ces formules sont fondées sur des hypothèses suffisamment générales et peuvent donc être utilisées dans le cadre de divers environnements fiscaux, à condition que l'investisseur dispose d'estimations pour les informations nécessaires. Les formules ont été programmées dans un chiffrier électronique que le lecteur peut télécharger de l'Internet.

2025, Computers & Mathematics with Applications

This paper discusses the optimal exercising for the investor who has American stock options under a prespecified strategy, where the exercise level for the investor grows as time elapses. We derive an explicit form of the net expected capital gain for the investor in such sltu, Ltlons and propose a method to obtain the optimal exercise policy and the corresponding capital gain numer~ ically. Finally, we compare with our model and one in an earlier contribution on the quantitative performance, and show that our method proposed herein is simple and useful in practical portfolio management.

2025, Jurnal Fourier

Since the signed memorandum of understanding between BAPEPAM with Dewan Syariah Nasional-Majelis Ulama Indonesia (DSN-MUI) on the principle of Islamic capital market in 2003, the Islamic capital market in Indonesia has developed significantly. In each investment, including Islamic capital market investment, there are 2 (two) fundamental things that always accompany it, the return and risks. This paper discusses the analysis of return and risk of sharia stocks that always go in Jakarta Islamic Index (JII) after the global crisis in 2008, risk analysis tools using Value at risk (VaR) approach to model the Generalized Autoregressive Conditional Heteroscedastic (GARCH), then proceed with the analysis of the typology to determine the characteristics of these stocks. The results that shares sharia can be grouped into 4 (four) : 6 (six) shares entering the low return and low risk (TLKM, UNVR, SMGR, AALI, ELSA, and SGRO), 3 (three ) shares into group of low-return but high risk (INCO, ANT...

2025

This paper investigates the possibility of accounting for the role played by institutions in the dynamics of technical change and growth in a policy oriented perspective. The main question is to choose the institutions relevant for such... more

2025, Review of Economic Dynamics

In this paper, we study the quantitative implications of a real business cycle model where the firm is the capital owner, households are heterogeneous, and markets are incomplete due to restricted asset trade. Since, under these assumptions, the usual firm objective is no longer well defined, several non-standard objectives are incorporated into the model. These include variants of market value maximization and a utility function for the firm. We find that the presence of market incompleteness alters little the behavior of asset returns. On the other hand, the behavior of the macroeconomic aggregates is quite sensitive to the firm objective, which affects the capital accumulation path. In contrast to conventional findings, capital is not necessarily higher when markets are incomplete. In addition, the different capital accumulation effects imply that shareholders with different asset wealth might prefer different firm objectives.

2025

The need to deconsolidate urban land as a catalyst for obtaining urban use in transformation and reform ac-tions, which in turn facilitate urban regeneration opera-tions. It is proposed that land for development should not be transformed in order to prevent the city from growing and therefore consuming more land, and that cities should be regenerated by obtaining the necessary capital gains from the transformation of urban land. After studying the data obtained from the National In-stitute of Statistics on the transfer of property rights for the year 2019, it is possible to observe the variations in the trends of purchase and sale with respect to previ-ous years and how the purchase and sale of rustic land is decreasing. A new challenge for cities is to transform themselves to achieve the objectives of the Spanish Ur-ban Agenda.La necesidad de desconsolidación del suelo urbano como catalizador para la obtención de aprovechamientos urba-nísticos en actuaciones de transformación y ref...

2025, RePEc: Research Papers in Economics

The presence of "holdouts" in recent sovereign debt swaps poses a challenge to bargaining models which assume all creditors to be homogeneous. We modify the Rubinstein "alternating offers" framework so as to accommodate exogenous creditor heterogeneity -specifically holdouts more patient than other bondholders. The "second best" equilibrium derived is an initial offer and an associated "lock-law" sufficient to tempt impatient creditors into a prompt bond exchange. This is followed by a delayed, but more generous, swap with the patient creditors, timed to take place when the lock-law expires. In practice, however, the presence of holdouts may be endogenous: they may be late-comers who buy distressed bonds with a view to litigating for the full face value plus their costs of waiting. Provisions for protecting other bond holders from the negative externality caused by such tactics are briefly discussed. However, where the judge has mandated good faith bargaining with holdout creditors, the bargaining outcome we derive may be useful to indicate a basis for compromise.

2025

We explore how prospects of economic recovery and the constraints imposed by sustainability can cause delay in bargaining, particularly when there is asymmetric information between debtor and creditor. Motivation for this analysis is the time taken to arrange the Argentine debt swap concluded in 2005. In the first section, a simple two-period model of bargaining with symmetric information is used to show that 'efficient delay' can occur when growth prospects exceed the rate of discount and there are no contingent contracts, as in . Given the concern for sustainability during the Argentine negotiations, however, the game is changed to reflect the view of a more Cautious debtor for whom no settlement is worthwhile unless it is sustainable. If this condition is binding in the first period, it may delay agreement that would otherwise have taken place: but this requires a high level of discounting. Allowing for two types of debtor and for asymmetric information increases the likelihood of delay, however, as it can act as costly signal by the Cautious debtor in a separating equilibrium. Was the Argentine offer at Dubai deliberately set low enough so as to ensure prompt rejection; to a subsequent reappraisal of the debtor's type; and to a final settlement that respected concern for sustainability? We cite anecdotal evidence on the Argentine negotiation position that it is consistent with this signalling interpretation.

2025, Journal of Banking & Finance

The Tax Reform Act (TRA) of 1986, among other things, equalized the nominal taxation of dividend and capital gains income. The evidence is consistent with the hypothesis that ordinary investors rebalanced their portfolio holdings in response to the new taxes. Such rebalancing appears to have concentrated on liquid stocks indicating that transaction costs are an important consideration for ordinary investors involved in restructuring their portfolio holdings. The tax clientele relationships that existed prior to the new Act were distorted temporarily but have reappeared by 1988. Interestingly, investors' post-reform effective tax rates still give a preference to capital gains as they did prior to the tax reform. *This study was completed while the second author was at the University of Wisconsin-Madison. The authors alone are responsible for the opinions expressed in this paper. We would like to thank Amir Bamea, T. Karpoff, Uri Lowenstein, George OkGeld and George Philippatos for their helpful comments and suggestions, and Drexel, Bumham and Lambert, Inc. for providing the data.

2025

or visit the DOI to the publisher's website. • The final author version and the galley proof are versions of the publication after peer review. • The final published version features the final layout of the paper including the volume, issue and page numbers. Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal. If the publication is distributed under the terms of Article 25fa of the Dutch Copyright Act, indicated by the "Taverne" license above, please follow below link for the End User

2025

Abstract: This paper studies the effects of demand and supply shocks in the global crude oil market on several measures of countries ’ external balance, including the oil trade balance, the non-oil trade balance, the current account and changes in net foreign assets (NFA) during 1975– 2004. We explicitly take a multilateral and global perspective. In addition to the United States, the Euro area and Japan, we consider a number of regional aggregates including oil-exporting economies and middle-income oil-importing economies. Our first result is that the effect of oil shocks on the merchandise trade balance and the current account, which depending on the source of the shock can be large, depends critically on the response of the non-oil trade balance, and differs systematically between the United States and other oil importing countries. Second, using the Lane-Milesi-Ferretti NFA data set, we document the presence of large and systematic (if not always statistically significant) valua...

2025, Journal of Applied Probability

Under proportional transaction costs, a price process is said to have a consistent price system, if there is a semimartingale with an equivalent martingale measure that evolves within the bid-ask spread. We show that a continuous, multi-asset price process has a consistent price system, under arbitrarily small proportional transaction costs, if it satisfies a natural multi-dimensional generalization of the stickiness condition introduced by Guasoni (2006).

2024, HAL (Le Centre pour la Communication Scientifique Directe)

2024, RePEc: Research Papers in Economics

In this paper, we present a micro estimate detennining taxable income as a function of gross income and all major deduction options depending on ho~sehold and asset categories. It is shown that tax savings strongly increase with ulcreasing income, resulting in a decreasing effective marginal tax rate for the highest income groups. We compute a lower bound on 1983 aggregate income tax losses' to the German fiscal authorities of DM 72b, or of 45 % of wage and income taxes paid in 1983. The estimate of tax loss exceeds estimates for other countries by orders of magnitude.

2024, RePEc: Research Papers in Economics

2024, Ag Decision Maker Newsletter

2024

The relationship between politicians and firms has attracted a considerable amount of research, especially in developing countries, where firms' political links are a widespread phenomenon. However, existing literature offers contradicting views about this relationship, espicially regarding the impact of firms' political connections on firms' market-performance. Furthermore, there is limited evidence on the impact of firms' political connections on some of the important corporate decisions, including firms' investment-and dividend-policies.

2024

L. No. 94-455. Citations to the INTERNAL REVENUE CODE OF 1954 [hereinafter cited as INT. REV. CODE OF 1954 and referred to as the Code] are to the version in force immediately prior to the enactment of the 1976 Tax Reform Act, unless otherwise noted. 2. Prior to the 1976 Tax Reform Act, there had never been any periodic reporting requirements which would have enabled the Treasury Department to compile statistics regarding the year-to-year operation of foreign trusts after their establishment by U.S. citizens. The first of any foreign trust reporting provisions, in fact, was passed by Congress in the Revenue Act of 1962, which simply required that, upon the creation of, or the transfer of property to, a foreign trust, the grantor or transferor file such forms as the Secretary might prescribe.

2024, RePEc: Research Papers in Economics

This paper analyzes the likely economic consequences of a specific proposal for corporate i ncome tax reform in Switzerland that is based on the recent ERU (2001) report. The proposal includes a partial dividend tax relief, more effective taxation of capital gains, and a property tax reduction, all relating to qualified stakes in corporate firms. Based on an analytical and quantitative analysis, we find that the reform removes an important tax barrier against dividend payments, reduces the cost of equity capital, thereby reduces debt leverage and encourages i nvestment in the corporate sector. In stimulating transitional growth towards higher long-run income levels, the reform expands tax bases and thereby becomes considerably less costly in the long-run. A sensitivity analysis shows that the quantitative results are rather robust. 1

2024

The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.

2024, Labour Economics

The paper studies a matching model with on-the-job search, transferable utility and heterogeneous agents. Matched agents can set the conditions under which a given match can be dissolved. It is shown that matched agents use sign-off fees to extract all capital gains from trade when a third agent is contacted. In equilibrium, this redistributes wealth towards less able individuals, reduces the likelihood that any given match will be rejected and, given the conditions, it yields efficiency. Although externalities arise when a match is formed and when turnover occurs, the decentralized outcome is efficient when the production function is sub-modular and the difference in abilities is big enough. The results obtained may provide theoretical support for the type of contracts used in some markets, such as sports markets.

2024

Recent works in the socio-economic and comparative political economy literature suggest the emergence of a predominant neoliberal model of capitalism, which is gradually being adopted by most advanced countries. A similar trend is present in the management literature where competitive advantages are increasingly being associated with a predominant strategic paradigm (integrated global engagement) leaning on the complementarities among RD b) firms that have not adopted a strategy of global engagement are markedly heterogeneous in terms of both structural characteristics and institutions-related variables. In other words, global engagement is associated with a lower degree of the differentiation between Italian and German firms, but the variety of institutional settings continues to affect the evolution of businesses. Policy implications are discussed.

2024

The different issues that can be identified in addressing the relationship between income taxation and accounting. Substantive and formal aspects of this relationship. The concept of a formal conformity relationship as meaning that sound legal choices made in commercial accounts are preclusive for tax purposes. The formal conformity relationship as a normative concept. How a formal conformity can be defined in a normative sense. The structural elements of the norm setting out a formal conformity. An application of the normative definition of formal conformity to the German, Spanish, Italian, French and Portuguese systems. Differences in the legal formulae used in these systems and an analysis of the meaning of these differences. The “reverse dependence” between tax accounting and commercial accounting. The recent development concerning “reverse dependence” in the studied five systems.

2024

Starting with Vickrey (1945) and Mirrlees (1971), the optimal tax literature has studied the design of a personal income tax. The assumed ideal would be to tax earnings ability. Earnings ability is unobservable for tax purposes, however. Past papers have focused instead on designing a tax on labor income. Existing tax bases, though, depend on a broader range of information about each individual than just labor income. In principle, this supplementary information can help in designing a tax that has more attractive distributional properties, by more closely approximating an ability tax. The objective of this paper is to lay out theoretically and estimate empirically how to make best use of available information about each individual in addition to earnings, in a setting where the first-best tax would be an ability tax. The theory lays out an equity/efficiency trade off when choosing the tax base. In the empirical work, we find the tax base that is best on equity grounds alone. We find that the choice to tax couples based on their joint income, and the inclusion of dividends, interest income, and dependents' deduction in the tax base in roughly their current form can be rationalized simply based on their value in better approximating an ability tax, without any need for supplementary motivations for these provisions. However, the inclusion of mortgage and property tax payments in the list of itemized deductions cannot be defended on these grounds.

2024, Accounting and Finance

This paper develops a version of the Capital Asset Pricing Model that views dividend imputation as affecting company tax and assumes differential taxation of capital gains and ordinary income. These taxation issues aside, the model otherwise rests on the standard assumptions including full segmentation of national capital markets. It also treats dividend policy as exogenously determined. Estimates of the cost of equity based on this model are then compared with estimates based on the version of the CAPM typically applied in Australia, which differs only in assuming equality of the tax rates on capital gains and ordinary income. The differences between the estimates can be material. In particular, with a high dividend yield, allowance for differential taxation can result in an increase of two to three percentage points in the estimated cost of equity. The overall result obtained here carries over to a dividend equilibrium, in which firms choose a dividend policy that is optimal relative to the assumed tax structure.

2024, Social Science Research Network

The unrealized capital gains hypothesis of Malkiel (1977) is one of the most important explanations for the level of closed-end fund discounts. However, empirical tests of this hypothesis have provided conflicting results. This may be due to the fact that the timing of future realizations of capital gains is uncertain, making their impact on discounts difficult to assess. This paper takes an alternative approach to examining the impact of unrealized capital gains on closed-end fund discounts. We argue that since dividend distributions by closedend funds often include cash flows generated by the realization of previously unrealized capital gains, the magnitude of quarterly dividend distributions will tend to be associated with changes in the level of unrealized capital gains embedded in the prices of closed-end shares. Therefore, the tax liability hypothesis implies that dividend distributions will be associated with changes in closed-end fund discounts. Using an event study approach to examine the behavior of closed-end fund discounts around dividend distributions, we show that the periodic dividend distributions by closed-end funds explain a significant portion of the short-run fluctuations in discounts. ◊ Day and Xu are with the School of Management,

2024, El Circulo de la Danza 1

En México la celebración del Día de Muertos, es devoción misteriosa donde se mezcla lo religioso y lo pagano, el miedo y la burla. A la muerte la ridiculizan en caricaturas y “calaveras”, y se la comen en dulce o pan. Palabras clave:... more

En México la celebración del Día de Muertos, es devoción misteriosa donde se mezcla
lo religioso y lo pagano, el miedo y la burla. A la muerte la ridiculizan en caricaturas y “calaveras”, y se la comen en dulce o pan.
Palabras clave: cementerio, calaveras, muerte

2024

We show how the tax shield of debt can distort ownership efficiency in the market for corporate control. Firms with higher optimal leverage, but who are less efficient owners, can outbid more efficient owners of assets with lower optimal leverage. If the acquisition price is fully deductible, however, tax shields play no role because competitive bidding for assets generate sufficient deductions from the acquisition price alone to ensure bidders pay no taxes in equilibrium. Policies to equalize the tax treatment of debt and equity (such as limits the tax shield of debt) can improve ownership efficiency and total welfare by weakening the connection between leverage and outcomes in bidding contests.

2024

This paper compares the depth and length of the recent crisis with the Great Depression in the 1930s. It claims that economic policy played a crucial role in shortening and curtailing the recent crisis. We analyse which policies were applied during the recent crisis and which measures worked. We know that policies relying on large infrastructure projects inherently involve an

2024, Tax Notes International

In this article, the author reviews Australia’s personal service income regime
to highlight uncertain directions that tax laws can take.

2024

This study attempts to decode the puzzle surrounding the pricing of equity IPOs issued through bookbuilding pricing method in India in the period from 2000 to 2014. Using a sample of 100 bookbuilt IPO issues in the study period the study reveals the significant value drivers for IPO price by applying multivariate regression analysis to a select set of explanatory variables for IPO value. The study results establish post issue promoter and promoter groups retained ownership levels, Net worth per equity share, industry composite price to earnings ratio, earnings per share and rate of subscription of IPOs by institutional investors as significant pricing determinants of sample bookbuilt IPOs.

2024

Business Organisation as an Evolving System in the Competitive Environment 107 4. A PROPOSED METHODOLOGY FOR DESIGN AND IMPLEMENTATION OF DECISION SUPPORT SYSTEMS 116 4.1 The Aim of the Methodology 116 4.2 Rationale of the System 117 4.2.1 The Objectives of Support System 4.2.2 System Configuration 4.3 Methodology for Designing a Proposed System 4.3.1 The Basis of the Methodology 4.3.2 Conditions Necessitating the Implementation of the Proposed System 4.3.3 Methodology for Designing the Total System 139 4.3.4 Methodology for Designing Decision Units 4.4 Further Development at Post-Commissioning 4.5 Contributions of the Proposed System to the General Management Process 162 2 5. APPLICATION FOR AN INTEGRATED OIL PROCESSING AND DISTRIBUTION SYSTEM 167 5.1 Scope of the Application 167 5.2 Review of the Business Environment of Oil Processing and Distribution Systems 5.. 2.1 Leading Particulars and Dynamics of the Business Environment 5.2.2 Decision Environment and the Scope of Requirements for Decision Support Systems 5.3 Development of the Proposed System 197 5.3.1 Identification of Decision Unitsiand Information Links between them 197 5.3.2 Coordination and Rationalisation of the Obtained Model 215 6 DETAILS OF THE SYSTEM 228 6.1 Development of the Decision Units 228 6.2 Identification and Analysis of the Decision-Making Scenarios 230 6.2.1 Identification of the Decision-Making Scenarios 230 6.2.2 Analysis of the Decision-Making Scenarios 236 3 6.3 Requirements for Quantitative Models 6.4 Model Development 7. DISCUSSION 7.1 Contributions to the Design of Decision Support Systems for Operational Management of Industrial Corporations 7.2 Implications of the System Implementation on Industrial Management 8. CONCLUSIONS

2024, Social Science Research Network

for their guidance and helpful comments. Financial support from the Social Sciences and Humanities Research Council is gratefully acknowledged.

2024

The deceleration of the global economy resulted in a significant decline in world commodity prices, especially coal. The decline in these commodities made the stock price of the coal subsector decline. This study aims to analyze the accuracy of William's moving average and fractal indicator prediction signals with actual results on stock charts. The method used in this study is the Mann Whitney test. The study's conclusions show that the use of both technical analysis indicators to predict the direction of changes or movements in stock prices produces accurate findings, with predictive signals from fractal indicators and moving averages not much different from each other. Based on the accuracy rates of 87% and 85% respectively for William's fractals and moving averages, it can be concluded that William's fractal indicator is significantly more reliable than moving averages in predicting buy and sell signals for mining stock. Based on the findings of this study, both short-and long-term investors can benefit from using the Williams fractal indicator to predict future price trends and identify when to buy and sell stocks to maximize profits.

2024, Psicologia Em Estudo

RESUMO. Este texto pretende promover reflexões a respeito de uma proposta de formação de educadores organizada a partir da definição de Indicadores de Qualidade Social em Educação. Ganha importância a perspectiva de redimensionar as formulações sobre qualidade rechaçando a mediação das leis de mercado assumidas no capitalismo contemporâneo. A metodologia é pautada nas formulações da Análise Institucional, constituindo-se um campo de investigação/intervenção que buscou articular o trabalho pedagógico, a avaliação dos efeitos dessa ação nos alunos e o planejamento cotidiano, com base em um projeto geral. Esse processo reafirma um questionamento do aspecto meramente tecnicista presente nas propostas hegemônicas de formação de educadores. O projeto de pesquisa se realizou no espaço de práticas educativas de um programa social na Área da Maré/RJ, que organizava oficinas de arte em escolas públicas onde, através das propostas desenvolvidas, ganharam visibilidade as relações que ali se instituíam e as forças presentes em um processo atravessado pelas instituições do saber/poder. Palavras-chave: avaliação qualitativa, metodologia de pesquisa, educação pública.

2024, Psicologia em Estudo

2024, Canadian Journal of Economics

This paper is prepared for International Risk Sharing Conference at ECARES (Universite Libre de Bruxelles, http://www.ecares.org/), October 22-23, 2010. The authors thank Kenza Benhema and participants in the conference for valuable suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

2024

This dissertation has been submitted in partial fulfillment of requirements for an advanced degree at The University of Arizona and is deposited in the University Library to be made available to borrowers under rules of the library. 3 Brief quotations from this dissertation are allowable without special permission, provided that accurate acknowledgment of source is made. Requests for permission for extended quotation from or reproduction of this manuscript in whole or in part may be granted by the head of the major department or the Dean of the Graduate College when in his or her judgment the proposed use of the material is in the interests of scholarship. In all other instances, however, permission must be obtained from the author.

2024, Vilnius University open series

In 2021, there are reportedly 2,755 billionaires on Earth, with an estimated total net worth of $13.1 trillion. Every year the newspaper Forbes conducts the list of World Billionaires, but we need to acknowledge that, not all billionaires and their wealth gets reported. Usually, the net worth is reported by calculating the number of stocks with the number of shares that the person owns. We take into consideration that the number we see in the newspaper exists only on paper, but the amount of money in the bank account of Billionaire does, not reflect that kind of wealth in any shape and form. Paper wealth differs from "real" or actual wealth, which is the value of the physical assets that are at the disposal of an individual or company. Many individuals and corporations fall victim to the paper wealth trap. On paper, it looks as though the assets logged are worth a certain amount, but the real assets in hand do not add up to the same. In order to assess, the real wealth individual has to realize the asset in the market by selling the asset mentioned below. If the taxpayer sells these assets, it has accumulated capital gains, then the taxpayer is subject to capital gains taxes. By using the tax planning strategy "Buy, Borrow, and Die" the wealthy individual avoids paying the capital gain tax on the assets that they have. This principle suggests buying and holding assets as they appreciate tax-free, as well borrow using the assets as leverage and using debt to reduce or eliminate income and estate taxes, and maximize aftertax wealth accumulation, as well after the taxpayer pass away the heirs, sell the whole wealth is tax-free, and the debt is paid with the tax-free proceeds.