The implications of risk and irreversibility for the measurement of marginal effective tax rates on capital are examined. It is shown that, when capital is irreversible, the marginal effective tax rate is an increasing function of systematic and unsystematic capital and income risk. The tax...

The 1986 Canadian federal budget, which increased the tax rate on dividends vis-a-vis capital gains, provides a natural experiment for examining the relationship between taxation and asset values. The authors employ a stock market event study to investigate the differential impact of this tax...