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 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 Economic Effects of Dividend Taxation written by Canada. Department of Finance. Technical Committee on Business Taxation and published by . This book was released on 1996 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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 Economic Effects of Dividend Taxation December 1996 written by Canada. Technical Committee on Business Taxation and published by . This book was released on 1996 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effects of Dividend Taxes on Equity Prices written by Stephen Bond and published by International Monetary Fund. This book was released on 2007-08-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: We re-examine the extent to which personal taxes on dividends are capitalized into the equity prices of domestic firms, using data from around the time of the 1997 U.K. dividend tax reform, which removed a significant tax credit for an important group of investors: U.K. pension funds. The tax-adjusted CAPM suggests that the impact should depend on an average of dividend tax rates across all investors, and that U.K. pension funds should reduce their holdings of the previously tax-favored asset: U.K. equities. Given that U.K. pension funds are small relative to the total size of the world capital market, a small open economy-type argument implies that the main effect of the reform would be to reduce U.K. pension funds' ownership of U.K. equities, with little impact on their price. We present evidence which is consistent with these hypotheses. We discuss why previous research (Bell and Jenkinson, 2002) reached a different conclusion.
Download or read book The Economic Effects of the Corporate Income Tax written by Alan J. Auerbach and published by . This book was released on 1984 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Discusses the extent to which dividend taxation imposes a "double tax" on corporate source earnings; the historical impact of tax incentives on the incentives to invest and the value of corporate equity; the effects of limited loss offset provisions on the incentives to invest in risky assets; and the determinants of corporate leverage.
Download or read book The Share Price Effects of Dividend Taxes and Tax Imputation Credits written by Trevor S. Harris and published by . This book was released on 1999 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the hypothesis that dividend taxes are capitalized into share prices by focusing on investors' implicit valuations of retained earnings versus paid-in equity. Retained earnings are distributable as taxable dividends, whereas paid-in equity is distributable as a tax-free return of capital. Consistent with dividend tax capitalization, firm-level results for the United States indicate that accumulated retained earnings are valued less per unit than contributed capital. In addition, differences in dividend tax rates across U.S. tax regimes are associated with predictable differences in the magnitude of the implied tax discount for retained earnings, as are differences in dividend tax rates across Australia, Japan, France, Germany, and the United Kingdom
Download or read book The Effects of Taxation on Multinational Corporations written by Martin Feldstein and published by University of Chicago Press. This book was released on 2007-12-01 with total page 338 pages. Available in PDF, EPUB and Kindle. Book excerpt: The tax rules of the United States and other countries have intended and unintended effects on the operations of multinational corporations, influencing everything from the formation and allocation of capital to competitive strategies. The growing importance of international business has led economists to reconsider whether current systems of taxing international income are viable in a world of significant capital market integration and global commercial competition. In an attempt to quantify the effect of tax policy on international investment choices, this volume presents in-depth analyses of the interaction of international tax rules and the investment decisions of multinational enterprises. Ten papers assess the role played by multinational firms and their investment in the U.S. economy and the design of international tax rules for multinational investment; analyze channels through which international tax rules affect the costs of international business activities; and examine ways in which international tax rules affect financing decisions of multinational firms. As a group, the papers demonstrate that international tax rules have significant effects on firms' investment and other financing decisions.
Download or read book New Evidence of the Impact of Dividend Taxation and on the Identity of the Marginal Investor written by Leonie Bell and published by . This book was released on 2001 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impact of Dividend Taxation on Dividends and Investment written by Seppo Kari and published by . This book was released on 2009 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Deficits and the Dividend Tax Cut written by Katherine Pratt and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2003 dividend tax cut is scheduled to expire in 2010, but President Bush continues to urge Congress to make it permanent. President Bush argues that the dividend tax cut promotes long-term economic growth, stimulates the economy, makes the tax system fairer, provides a steady source of income for needy senior citizens, and pays for itself. This Article evaluates the various rationales President Bush offered to justify the dividend tax cut, with an emphasis on the long-term growth rationale. The economic effects of the dividend tax cut, determined without regard to the fact that it was deficit financed, are controversial and the subject of continuing debate among economists. Early evidence suggests that the tax cut increased the size of dividend payouts and the initiation of dividend payouts. Other evidence suggests, however, that the dividend increases may not be as large as some studies indicated, may not be attributable to the dividend tax cut, and may be temporary. Taking into account the deficit financing of the dividend tax cut, the economic effects of the dividend tax cut are clearer. The deficit financing of the dividend tax cut creates negative growth consequences that offset any positive growth consequences of dividend tax relief. The dividend tax cut also is inequitable. It disproportionately benefits high-income Americans but disproportionately burdens low-income and middle-income Americans, due to the effects of cuts in discretionary spending, such as the 2004 and 2005 federal budget cuts that stalled necessary maintenance work on the New Orleans levee system just before Hurricane Katrina. Congress should not make the dividend tax cut permanent and should repeal the dividend tax cut immediately. Cutting the shareholder-level tax on dividends could have been a viable way of reforming the corporate tax if the dividend tax cut had been structured to ensure that corporate income is taxed at least once and Congress had made up the lost revenue in an equitable and efficient manner or had enacted offsetting spending cuts in an equitable and efficient manner. As enacted, the dividend tax cut does not ensure that corporate income will be taxed at least once and was deficit financed without regard for the harmful future economic and distributional consequences of that deficit financing. This Article also considers the tax policy implications of the long term fiscal gap and critiques the "five easy pieces" and "starve the beast" approaches to tax and budget policy.
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 Double Dividend written by Dale W. Jorgenson and published by MIT Press. This book was released on 2013-11-29 with total page 639 pages. Available in PDF, EPUB and Kindle. Book excerpt: A rigorous and innovative approach for integrating environmental policies and fiscal reform for the U.S. economy. Energy utilization, especially from fossil fuels, creates hidden costs in the form of pollution and environmental damages. The costs are well documented but are hidden in the sense that they occur outside the market, are not reflected in market prices, and are not taken into account by energy users. Double Dividend presents a novel method for designing environmental taxes that correct market prices so that they reflect the true cost of energy. The resulting revenue can be used in reducing the burden of the overall tax system and improving the performance of the economy, creating the double dividend of the title. The authors simulate the impact of environmental taxes on the U.S. economy using their Intertemporal General Equilibrium Model (IGEM). This highly innovative model incorporates expectations about future prices and policies. The model is estimated econometrically from an extensive 50-year dataset to incorporate the heterogeneity of producers and consumers. This approach generates confidence intervals for the outcomes of changes in economic policies, a new feature for models used in analyzing energy and environmental policies. These outcomes include the welfare impacts on individual households, distinguished by demographic characteristics, and for society as a whole, decomposed between efficiency and equity.
Download or read book A Tax based Test of the Dividend Signaling Hypothesis written by B. Douglas Bernheim and published by . This book was released on 1992 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose and implement a new test of the dividend signaling hypothesis that is designed to discriminate between dividend signaling and other theories that would account for the apparent existence of a dividend preference. Our test refines the use of data on stock price responses to dividend announcements. In particular, we study the effect of dividend taxation on the bang-for-the-buck, which we define as the share price response per dollar of dividends. Most dividend signaling models imply that an increase in dividend taxation should increase the bang-for-the-buck. In contrast, other dividend preference theories imply that an increase in dividend taxation should decrease the bang-for-the-buck. Since there have recently been considerable variation in the tax treatment of dividends, we are able to study dividend announcement effects under different tax regimes. Our central finding is that there is a strong positive relationship between dividend tax rates and the bang-for-the-buck. This result supports the dividend signaling hypothesis, and is consistent with alternatives. The paper also provides corroborating evidence based on the relationship between the bang-for-the-buck and bond ratings.
Download or read book Taxation in the Global Economy written by Assaf Razin and published by University of Chicago Press. This book was released on 2008-04-15 with total page 456 pages. Available in PDF, EPUB and Kindle. Book excerpt: The increasing globalization of economic activity is bringing an awareness of the international consequences of tax policy. The move toward the common European market in 1992 raises the important question of how inefficiencies in the various tax systems—such as self-defeating tax competition among member nations—will be addressed. As barriers to trade and investment tumble, cross-national differences in tax structures may loom larger and create incentives for relocations of capital and labor; and efficient and equitable income tax systems are becoming more difficult to administer and enforce, particularly because of the growing importance of multinational enterprises. What will be the role of tax policy in this more integrated world economy? Assaf Razin and Joel Slemrod gathered experts from two traditionally distinct specialties, taxation and international economics, to lay the groundwork for understanding these issues, which will require the attention of scholars and policymakers for years to come. Contributors describe the basic provisions of the U.S. tax code with respect to international transactions, highlighting the changes contained in the U.S. Tax Reform Act of 1986; explore the ways that tax systems influence the decisions of multinationals; examine the effect of taxation on trade patterns and capital flows; and discuss the implications of the opening world economy for the design of optimal international tax policy. The papers will prove valuable not only to scholars and students, but to government economists and international tax lawyers as well.
Download or read book Financing Corporate Capital Formation written by Benjamin M. Friedman and published by University of Chicago Press. This book was released on 2007-12-01 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt: Six leading economists examine the financing of corporate capital formation in the U.S. economy. In clear and nontechnical terms, their papers provide valuable information for economists and nonspecialists interested in such questions as why interest rates are so high, why corporate debt has accelerated in recent years, and how government debt affects private financial markets. Addressing these questions, the contributors focus chiefly on three themes: the actual use of debt and equity financing by corporations in recent years; the factors that drive the financial markets' pricing of debt and equity securities; and the relationship between corporations' real investment decisions and their financial decisions. While some of the papers are primarily expository, others break new ground. Extending his previous work, Robert Taggart finds a closer relationship between corporate and government debt than has been supposed. Zvi Bodie, Alex Kane, and Robert McDonald conclude in their study that the volatility of interest rates under the Volcker regime has led to a rise in real interest rates because of investors' demand for a greater risk premium. All of the papers present empirical findings in a useful analytical framework. For its new findings and for its expert overview of issues central to an understanding of the U.S. economy, Financing Corporate Capital Formation should be of both historical and practical interest to students of economics and practitioners in the corporate and financial community.
