In this paper we investigate the extent to which the U.S. income tax system of 2004 collects tax on capital income, and the implications of extending tax-preferred savings accounts. We do so by applying a methodology that estimates how much tax is collected on capital income by calculating how...

This paper develops an agency-cost model of firm financial policies, building on the intuition in Easterbrook (1984) and Jensen (1986). Agency costs arise when managers gain by investing available cash even when doing so lowers share values. Dividends then restrict the cash available to...