Document Type


Publication Date



We conduct the first survey experiment to understand public attitudes about the capital gains realization rules. These rules requires that assets usually must be sold before gains on them are taxed and thus makes taxing capital income much harder. We have three main findings. First, respondents strongly prefer to wait to tax gains on stocks until sale: 75% to 25%. But the flip side is that there is surprisingly strong support for taxing gains on assets at sale or transfer, including at death, in areas where current law never taxes those gains. Second, these stated views change only modestly when randomized participants observe a policy debate composed of videos explaining both the pros and cons of taxing before sale, though the pro and con treatments have large effects individually. And, third, among many possible explanations of these attitudes, we find particular evidence for three: mental accounting; status quo effects; and a desire to tax consumption, not income.


This is an author-accepted manuscript. The version of record can be found at Fox, Edward Gellis and Zach Liscow. "The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule." Journal of Public Economics 213 (2022). DOI:

An early version of this article was also previously published online in the CLS Blue Sky Blog

Available for download on Thursday, August 01, 2024

Included in

Tax Law Commons