explanation for the heretofore puzzling finding that, following the unprecedented 2003 reduction in dividend tax rates, non-dividend …-paying firms outperformed dividend-paying firms. Not surprisingly, we find that non-dividend-paying firms are more financial … constrained than dividend-paying firms are. When a firm's financial constraint and dividend choice are jointly considered, we find …

This paper tests whether the 2003 dividend tax cut—one of the largest reforms ever to a U.S. capital tax rate … models in which dividend tax reforms affect the cost of capital. Either way, it may be difficult to implement an alternative … dividend tax cut that has substantially larger near-term effects …

To study the long-run effect of dividend taxation on aggregate capital accumulation, we build a dynamic general … equilibrium model in which there is a continuum of firms subject to idiosyncratic productivity shocks. We find that a dividend tax … model simulations show that when both dividend and capital gains tax rates are cut from 25 and 20 percent, respectively, to …

dividend income and that on accruing capital gains. It describes the construction of weighted average marginal tax rate series … impact of this change on payout depends on the elasticity of dividend payments with respect to the after-tax value of … dividend income relative to capital gains. Time series estimates suggest an elasticity of more than three, and imply that the …

retaining earnings. This alternative view holds that while changes in the dividend tax rate will affect shareholder wealth, they … these two views of dividend taxation. By extending Tobin's quot;qquot; theory of investment to incorporate taxes at both the … time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial …

We examine the hypothesis that dividend taxes are capitalized into share prices by focusing on investors' implicit …-in equity is distributable as a tax-free return of capital. Consistent with dividend tax capitalization, firm-level results for … addition, differences in dividend tax rates across U.S. tax regimes are associated with predictable differences in the …