Should the Government Be Paying Investment Fees on $3 Trillion of Tax-Deferred Retirement Assets?

• 成果类型: Article
• 署名作者: Landoni, Mattia; Zeldes, Stephen P.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Boston; Columbia University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhae070
• 发表日期: 2024
• 页码: 1014
• 关键词: monopolistic competition; product differentiation; FINANCE INDUSTRY; demand curves; search costs; stock-market; Fund size; performance; taxation; equity

摘要

Under standard assumptions, individuals and the government are indifferent between traditional tax-deferred retirement accounts and front-loaded (Roth) accounts. Adding investment fees to this benchmark, individuals are still indifferent, but the government is not. We show that under weak conditions firms charge equal percent fees under both systems, yielding higher dollar fees under Traditional. We estimate that tax deferral increases demand for asset management services by $3.8 trillion, costing the government $23.4 billion in annual fees. In a general equilibrium differentiated-product model, tax deferral produces a larger asset management industry, higher taxes, and lower social welfare.