"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 cut raises aggregate productivity by reducing the...

Big businesses start small. With the proposed Republican tax reform announced on September 28th, small business taxes will be dropped sharply making it attractive for start-up companies to locate and grow in the U.S.This is in sharp contrast to the recent debate in Canada whereby small...