Shareholder tax cuts with household and firm heterogeneity

Anagnostopoulos, Alexis and Ateşağaoğlu, Orhan Erem (2023) Shareholder tax cuts with household and firm heterogeneity. Finance Research Letters, 57 . ISSN 1544-6123

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The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.
Item Type: Article
Uncontrolled Keywords: Dividends; Heterogeneous shareholders and firms; Investment; Shareholder taxes
Divisions: Sabancı Business School
Depositing User: Orhan Erem Ateşağaoğlu
Date Deposited: 07 Aug 2023 21:47
Last Modified: 07 Aug 2023 21:47

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