We examine stock prices and the number of stocks traded around ex-dividend dates of German stocks with tax …-free dividend. Tax-free dividends are temporarily tax-exempt, as they reduce the initial purchasing price of a stock. With our … empirical results indicate that ex-date prices decline, on average, by the amount of the dividend. We do not find a significant …

responses. The first elasticity (supply side) is the sole real factor limiting optimal top tax rates. The optimal tax system … should be designed to minimize the second elasticity (avoidance) through tax enforcement and tax neutrality across income … forms, in which case the second elasticity becomes irrelevant. The optimal top tax rate increases with the third elasticity …