We interpret the marginal welfare cost of capital income taxes as the present discounted value of consumption distortions. Such an asset market interpretation emphasizes the importance of the interest rate used to value future distortions, especially in the presence of uncertainty. We find that...

This paper studies the distortionary impact of progressive dividend taxation on investment decisions under the premises of the “new” view. According to the new view, proportional dividend taxation does not distort firms' investment decisions. We find that progressive dividend taxation...

We use an asset pricing perspective to provide a novel interpretation of the marginal welfare cost of capital income taxes. We show that the marginal welfare cost can be interpreted as the normalized present discounted value of consumption distortions from capital income taxes. Such an...