The results of the study indicate that high capital taxes lock up capital and thus results in a more difficult situation for growing companies.

The availability of venture capital is reduced, which has a negative impact on business innovation in the economy.

One of the most serious potential problems of high capital taxes is that the lock-in of capital makes it difficult for emerging companies and industries to gain access to venture capital, which has a negative impact on business innovation in the economy.

The results of the study indicate that raising the capital gains tax of 10 percent on average leads to that the number of realizations is reduced by almost 9 percent. Lock-in effects also tends to be greater for investors with taxable property, which indicates that these individuals in the greater extent use tax planning in order to escape taxation of capital gains.

Are high taxes on capital gains associated with a lock-in effect?

This question was discussed with Sven-Olov Daunfeldt, together with Ulrika Praski-Ståhlgren and Niklas Rudholm, in the article "Do High Taxes Lock-in Capital Gains? Evidence from a Dual Income Tax System," which has been approved for publication in the scientific journal Public Choice.


                                                                                      Cecilia Helland