Discussion of Germany's repeal of the corporate capital gains tax: the equity market response.

AUTHORS' ANALYSIS

Edwards et al. (2004) address an important research question in a relatively unique setting: the taxation of corporate horizontal capital gains tax and the amplitude to which those taxes cause economic inefficiencies. Inefficiencies can arise if capital gains taxes cause assets to be "lock in" to les than optimal uses. Although it present the appearances obvious that "lock-in" be met withs the extant literature indicates that the matter is not thus clear. The advent of sophisticated investment vehicles (such as obligation Exchangeable for Common Stock [DECS]; diocese Sheppard ...