Download or read book Dividend Taxation and Intertemporal Tax Arbitrage written by Anton Korinek and published by . This book was released on 2008 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the effects of changes in dividend tax policy using a life-cycle model of the firm, in which new firms first access equity markets, then grow internally, and finally pay dividends when they have reached steady state. In accordance with the traditional view of dividend taxation, new firms raise less equity and invest less the higher the level of dividend taxes. However, as postulated by the new view of dividend taxation, the dividend tax rate is irrelevant for the investment decisions of internally growing and mature firms. Since aggregate investment is dominated by these latter two categories, the level of dividend taxation as well as unanticipated changes in tax rates have only small effects on aggregate investment. Anticipated dividend tax changes, on the other hand, allow firms to engage in inter-temporal tax arbitrage so as to reduce investors' tax burden. This can significantly distort aggregate investment. Anticipated tax cuts (increases) delay (accelerate) firms' dividend payments, which leads them to hold higher (lower) cash balances and, for capital constrained firms, can significantly increase (decrease) aggregate investment for periods after the tax change. The analysis of dividend taxation in a contestable democracy thus has to take into account future policy changes as well as expectations thereof. This can significantly alter the evaluation of any given dividend tax policy.

Download or read book Personal Income Taxes and Corporate Investment written by Murray Z. Frank and published by . This book was released on 2010 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we examine the impact of major dividend tax changes in the U.S. since 1980 on corporate investment. We find that dividend taxation has a significant effect on firm-level investment, and the effect crucially depends on the firm's cash-richness. A dividend tax cut tends to stimulate cash-poor firms' investment. But such stimulating effect weakens for firms that are cash-rich. The most cash-rich firms can even decrease their investment following a dividend tax cut, which may be due to their incentive for inter-temporal tax arbitrage in anticipation of tax changes. Our study suggests that future policy making on dividend taxation and the empirical assessment of the policy impact should take into serious consideration the heterogeneity in firms' cash positions. Dividend tax increases may generate little impact on aggregate investment in the short run. But it may have negative impact on the long-run economic growth by disproportionately harming startup firms and fast-growing young firms that are likely to be cash-poor.

Download or read book Dividend Taxation and Firm Performance with Heterogeneous Payout Responses written by Katarzyna A. Bilicka and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the short and long-run performance of firms that were differentially affected by a new tax on dividends in the lead-up to the Global Financial Crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to causally identify the policy impact. Consistent with intertemporal tax arbitrage, immediately-affected firms significantly reduce payouts. At a time of severe liquidity shortage, the average firm uses the undistributed cash to pay back debt. In the long run, the allocation of undistributed cash to investment, retained earnings, and debt repayment predicts growth and the likelihood of bankruptcy.

Download or read book The Economic Effects of Dividend Taxation written by James M. Poterba and published by . This book was released on 1984 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper tests several competing hypotheses about the economic effects of dividend taxation. It employs British data on security returns, dividend payout rates, and corporate investment, because unlike the United States, Britain has experienced several major dividend tax reforms in the last three decades. These tax changes provide an ideal natural experiment for analyzing the effects of dividend taxes. We compare three different views of how dividend taxes affect decisions by firms and their shareholders. We reject the"tax capitalization" view that dividend taxes are non-distortionary lump sum taxes on the owners of corporate capital. We also reject the hypothes is that firms pay dividends because marginal investors are effectively untaxed. We find that the traditional view that dividend taxes constitute a "double-tax" on corporate capital income is most consistent with our empirical evidence. Our results suggest that dividend taxes reduce corporate investment and exacerbate distortions in the intersectoral and intertemporal allocation of capital

Download or read book The Economic Effects of Dividend Taxation written by Kenneth James McKenzie and published by . This book was released on 1996 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Tax Clientele Effects of Dividends Under Intertemporal Consumption Choices written by Naoya Mori and published by . This book was released on 2015 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate investors putatively seek high dividends because marginal tax rates on dividends are lower than those on capital gains. However, a lower tax quot;ratequot; does not necessarily mean that a higher dividend is desirable. Taking the intertemporal consumption choices given, corporate investors are expected to prefer quot;time-preference-fitted dividendsquot; if tax rates remain constant over time; otherwise they confront a larger quot;amountquot; of tax obligation. If dividend shortfalls exist, they must realize capital gains and thereby suffer unfavorable tax treatment, whereas excessive payments cause intertemporal double taxation on reinvested dividends. Tax-saving problems should be linked with intertemporal consumption choices.

Download or read book Macroeconomic Effects of Dividend Taxation with Investment Credit Limits written by Matteo Ghilardi and published by International Monetary Fund. This book was released on 2022-07 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the effects of dividend taxation in a general equilibrium business cycle model with an occasionally-binding investment credit limit. Permanent dividend tax reforms distort capital investment decisions in the binding long-run equilibrium, but are neutral otherwise. Temporary unexpected tax cuts stimulate shortterm real activity in the credit-constrained economy, yet produce contractionary macroeconomic outcomes in the slack regime. The occasionally-binding constraint reconciles the `traditional' and `new' views of dividend taxation, and highlights the importance of measuring the firm's initial borrowing position before enacting tax reforms. Finally, permanently lower dividend taxes dampen financial business cycles, and help to explain macroeconomic asymmetries.

Download or read book Japan s Corporate Income Tax written by Ruud A. de Mooij and published by International Monetary Fund. This book was released on 2014-08-04 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores how corporate income tax reform can help Japan increase investment and boost potential growth. Using international and Japan-specific empirical estimates of corporate tax elasticities, investment is predicted to expand by around 0.4 percent for each point of rate reduction. International consensus estimates suggest further that between 10 and 30 percent of the static revenue loss could be recovered in the long run through dynamic scoring, although Japan’s offset may be closer to the lower bound. Compensating fiscal measures are necessary in light of Japan’s tight fiscal constraints. The scope for base broadening in the corporate income tax is found to be limited and some forms of base broadening will undo positive investment effects of a rate cut. Alternative revenue sources include higher consumption and property taxes. A gradual approach toward lowering tax rates mitigates windfall gains and reduces short-run revenue costs. An incremental allowance-for-corporate-equity system could boost investment with limited fiscal costs in the short run.

Download or read book Advances in Taxation written by John Hasseldine and published by Emerald Group Publishing. This book was released on 2018-11-15 with total page 221 pages. Available in PDF, EPUB and Kindle. Book excerpt: Eight chapters cover short selling and corporate tax avoidance, Fin48 and earnings management, the U.S. Jobs and Growth Tax Relief Reconciliation Act of 2003, the impact of social identity on reasonable compensation cases, FACTA, corporate tax compliance in Bangladesh, enforced tax compliance behavior in Malaysia, and tax morale in Greece.

Download or read book The Price of Inequality written by Joseph E. Stiglitz and published by W. W. Norton & Company. This book was released on 2013-04-08 with total page 592 pages. Available in PDF, EPUB and Kindle. Book excerpt: America currently has the most inequality, and the least equality of opportunity, among the advanced countries. While market forces play a role in this stark picture, politics has shaped those market forces. In this best-selling book, Nobel Prize winning economist Joseph E. Stiglitz exposes the efforts of well-heeled interests to compound their wealth in ways that have stifled true, dynamic capitalism. Along the way he examines the effect of inequality on our economy, our democracy, and our system of justice. Stiglitz explains how inequality affects and is affected by every aspect of national policy, and with characteristic insight he offers a vision for a more just and prosperous future, supported by a concrete program to achieve that vision."

Download or read book Lectures on Public Economics written by Anthony B. Atkinson and published by Princeton University Press. This book was released on 2015-05-26 with total page 568 pages. Available in PDF, EPUB and Kindle. Book excerpt: The definitive textbook on public finance—now back in print for the first time in years This classic introduction to public finance remains the best advanced-level textbook on the subject ever written. First published in 1980, Lectures on Public Economics still tops reading lists at many leading universities despite the fact that the book has been out of print for years. This new edition makes it readily available again to a new generation of students and practitioners in public economics. The lectures presented here examine the behavioral responses of households and firms to tax changes. Topics include the effects of taxation on labor supply, savings, risk-taking, the firm, debt, and economic growth. The book then delves into normative questions such as the design of tax systems, optimal taxation, public sector pricing, and public goods, including local public goods. Written by two of the world's preeminent economists, this edition of Lectures on Public Economics features a new introduction by Anthony Atkinson and Joseph Stiglitz that discusses the latest developments in the field and areas for future research. The definitive advanced-level textbook on public economics Examines the effects of taxation on households and firms Covers tax system design, optimal taxation, public sector pricing, and more Includes suggestions for further reading Additional resources available online

Download or read book Dimensions of Tax Design written by James A. Mirrlees and published by Oxford University Press. This book was released on 2010-04-29 with total page 1360 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Review was chaired by Nobel Laureate Professor Sir James Mirrlees of the University of Cambridge and the Chinese University of Hong Kong. --

Download or read book Rewriting the Rules of the American Economy An Agenda for Growth and Shared Prosperity written by Joseph E. Stiglitz and published by W. W. Norton & Company. This book was released on 2015-11-02 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: It’s time to rewrite the rules—to curb the runaway flow of wealth to the top one percent, to restore security and opportunity for the middle class, and to foster stronger growth rooted in broadly shared prosperity. Inequality is a choice. The United States bills itself as the land of opportunity, a place where anyone can achieve success and a better life through hard work and determination. But the facts tell a different story—the U.S. today lags behind most other developed nations in measures of inequality and economic mobility. For decades, wages have stagnated for the majority of workers while economic gains have disproportionately gone to the top one percent. Education, housing, and health care—essential ingredients for individual success—are growing ever more expensive. Deeply rooted structural discrimination continues to hold down women and people of color, and more than one-fifth of all American children now live in poverty. These trends are on track to become even worse in the future. Some economists claim that today’s bleak conditions are inevitable consequences of market outcomes, globalization, and technological progress. If we want greater equality, they argue, we have to sacrifice growth. This is simply not true. American inequality is the result of misguided structural rules that actually constrict economic growth. We have stripped away worker protections and family support systems, created a tax system that rewards short-term gains over long-term investment, offered a de facto public safety net to too-big-to-fail financial institutions, and chosen monetary and fiscal policies that promote wealth over full employment.

Download or read book Taxing Corporate Income in the 21st Century written by Alan J. Auerbach and published by Cambridge University Press. This book was released on 2007-04-16 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book was first published in 2007. Most countries levy taxes on corporations, but the impact - and therefore the wisdom - of such taxes is highly controversial among economists. Does the burden of these taxes fall on wealthy shareowners, or is it passed along to those who work for, or buy the products of, corporations? Can a country with high corporate taxes remain competitive in the global economy? This book features research by leading economists and accountants that sheds light on these and related questions, including how taxes affect corporate dividend policy, stock market value, avoidance, and evasion. The studies promise to inform both future tax policy and regulatory policy, especially in light of the Sarbanes-Oxley Act and other actions by the Securities and Exchange Commission that are having profound effects on the market for tax planning and auditing in the wake of the well-publicized accounting scandals in Enron and WorldCom.

Download or read book The Price of Inequality How Today s Divided Society Endangers Our Future written by Joseph E. Stiglitz and published by W. W. Norton & Company. This book was released on 2012-06-11 with total page 592 pages. Available in PDF, EPUB and Kindle. Book excerpt: A forceful argument against America's vicious circle of growing inequality by the Nobel Prize–winning economist. The top 1 percent of Americans control some 40 percent of the nation’s wealth. But as Joseph E. Stiglitz explains in this best-selling critique of the economic status quo, this level of inequality is not inevitable. Rather, in recent years well-heeled interests have compounded their wealth by stifling true, dynamic capitalism and making America no longer the land of opportunity that it once was. They have made America the most unequal advanced industrial country while crippling growth, distorting key policy debates, and fomenting a divided society. Stiglitz not only shows how and why America’s inequality is bad for our economy but also exposes the effects of inequality on our democracy and on our system of justice while examining how monetary policy, budgetary policy, and globalization have contributed to its growth. With characteristic insight, he diagnoses our weakened state while offering a vision for a more just and prosperous future.

Download or read book International Evidence on the Effects of Having No Capital Gains Taxes written by Fraser Institute (Vancouver, B.C.) and published by The Fraser Institute. This book was released on 2001 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Effects of Taxation on Capital Accumulation written by Martin Feldstein and published by Chicago : University of Chicago Press. This book was released on 1987 with total page 512 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on capital formation has long been a major focus of studies sponsored by the National Bureau of Economic Research because of the crucial role of capital accumulation in the process of economic growth. The papers in this volume examine the influence of taxes on capital formation, with specific focus on the determinants of saving and the process of investment in plant and equipment.