that features the main characteristics of the Finnish dividend taxation. In the model, entrepreneurs face a borrowing … constraint and have a consumption smoothing motive. We use the model to investigate how the current dividend taxation affects the … investment incentives. The results illustrate how the current dividend taxation in certain cases distorts firms’ investment …

-linear dividend taxation influences the allocation of labour and capital across different firms, average labour productivity and the … production technologies. We find that the current tax system is likely to distort resource allocation compared to linear dividend …