Shareholder tax cuts with household and firm heterogeneity

Alexis Anagnostopoulos; Orhan Erem Atesagaoglu

doi:10.1016/j.frl.2023.104173

Shareholder tax cuts with household and firm heterogeneity

Alexis Anagnostopoulos
, Orhan Erem Atesagaoglu

Economics

Sabanci University
University of Cambridge

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.

Original language	English
Article number	104173
Journal	Finance Research Letters
Volume	57
DOIs	https://doi.org/10.1016/j.frl.2023.104173
State	Published - Nov 2023

Keywords

Dividends
Heterogeneous shareholders and firms
Investment
Shareholder taxes

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10.1016/j.frl.2023.104173

Cite this

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title = "Shareholder tax cuts with household and firm heterogeneity",

abstract = "The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.",

keywords = "Dividends, Heterogeneous shareholders and firms, Investment, Shareholder taxes",

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year = "2023",

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AU - Atesagaoglu, Orhan Erem

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N2 - The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.

AB - The large reduction in dividend tax rates stipulated in the Jobs and Growth Tax Relief Reconciliation Act of 2003 has been found empirically to have no, or minor, effects on real outcomes. Motivated by this fact, we build a model that incorporates counteracting theoretical mechanisms of dividend taxes to determine which mechanism dominates quantitatively. Consistently with the empirical findings, the quantitative model generates a small negative effect on investment and negligible positive effects on output and labor earnings.

KW - Dividends

KW - Heterogeneous shareholders and firms

KW - Investment

KW - Shareholder taxes

UR - https://www.scopus.com/pages/publications/85165458388

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DO - 10.1016/j.frl.2023.104173

M3 - Article

AN - SCOPUS:85165458388

SN - 1544-6123

VL - 57

JO - Finance Research Letters

JF - Finance Research Letters

M1 - 104173

ER -

Shareholder tax cuts with household and firm heterogeneity

Abstract

Keywords

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