Gold and tax capitalization: A natural experiment |
| |
| Affiliation: | 1. Old Dominion University, 2165 Constant Hall, Norfolk, VA 23508, United States of America;2. Louisiana State University, 501 South Quad Dr., 2800 Business Education Complex, Baton Rouge, LA 70803, United States of America;3. Miami University, 800 E. High St. (FSB 3111), Oxford, OH 45056, United States of America;1. College of Banking and Financial Studies, Muscat, Oman, Curtin University, Perth, WA, Australia;2. School of Accountancy, Massey University, Private Bag 102904, Auckland, New Zealand;1. University of Colorado Colorado Springs, United States of America;2. University of North Florida, United States of America;3. The University of Texas at Arlington, United States of America |
| |
| Abstract: | This research examines whether U.S. income taxes are capitalized into gold coin prices. For years, the American Eagle (Eagle) was the sole gold coin to be IRA eligible. The Taxpayer Relief Act of 1997 expanded eligibility to include all other gold coins beginning on January 1, 1998, except the South African Krugerrand (Rand). In this natural quasi-experiment, we examine whether gold coin prices reacted to the change in IRA-eligibility. Results are largely consistent with the capitalization of implicit taxes in gold coin prices. When legislation allowing IRA eligibility of both the Canadian Maple Leaf (Maple) and the Rand was introduced, the prices of both coins increased relative to the Eagle. When final legislation excluded the Rand from IRA eligibility, but not the Maple, the Rand's price declined while the Maple's did not. The findings contribute to the tax capitalization literature and the effects of interjurisdictional taxation in integrated global markets. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
