Capital Gains Tax Overhang and Share Repurchases

2010 ◽  
Author(s):  
Jonathan B. Cohn ◽  
Stephanie A. Sikes
Keyword(s):  
Capital Gains ◽  
Share Repurchases ◽  
Capital Gains Tax ◽  
Tax Overhang

scholarly journals Dividends, Share Repurchases, and Tax Clienteles: Evidence from the 2003 Reductions in Shareholder Taxes

2011 ◽  
Vol 86 (3) ◽  
pp. 887-914 ◽  
Author(s):  
Jennifer L. Blouin ◽  
Jana S. Raedy ◽  
Douglas A. Shackelford
Keyword(s):  
Generalized Method Of Moments ◽  
Capital Gains ◽  
Share Repurchases ◽  
Individual Investors ◽  
Tax Rates ◽  
Capital Gains Tax ◽  
Firm Level ◽  
Shareholder Taxes ◽  
Tax Returns ◽  
Directors And Officers

ABSTRACT: This study jointly evaluates firm-level changes in investor composition and shareholder distributions following a 2003 reduction in the dividend and capital gains tax rates for individuals. We find that directors and officers, but not other individual investors, rebalanced their portfolios to maximize after-tax returns in light of the new tax rules. We also find that firms adjusted their distribution policy (specifically, dividends versus share repurchases) in a manner consistent with the altered tax incentives for individual investors. To our knowledge, this is the first study to employ simultaneous equations to estimate both shareholder and managerial responses to the 2003 rate reductions. We find that the generalized method of moments (GMM) estimates are substantially stronger than OLS estimates, consistent with our expectation that investor and manager responses are simultaneously determined. Failure to estimate systems of equations may account for some of the weak and conflicting results from prior studies of the 2003 rate reductions.

Taxation, Dividends, and Share Repurchases: Taking Evidence Global

2013 ◽  
Vol 48 (4) ◽  
pp. 1241-1269 ◽  
Author(s):  
Marcus Jacob ◽  
Martin Jacob
Keyword(s):  
Capital Gains ◽  
Event Studies ◽  
Share Repurchases ◽  
Capital Gains Tax ◽  
Single Event ◽  
Coefficient Estimates ◽  
Data Set ◽  
Propensity To Pay ◽  
Robust Evidence

AbstractWe compile a comprehensive international dividend and capital gains tax data set to study tax-based explanations of corporate payout for a panel of 6,035 firms from 25 countries for the period 1990–2008. We find robust evidence that the tax penalty on dividends versus capital gains corresponds closely with firms’ propensity to pay dividends and repurchase shares, and with the amount of dividends and shares repurchased. Our coefficient estimates suggest a smaller tax effect than reported in recent single-country, single-event studies. Instead, our results correspond more closely with historic long-term estimates of the elasticity of dividends.

scholarly journals Finance Act 1965: The Capital Gains Tax

1966 ◽  
Vol 29 (2) ◽  
pp. 181-184
Author(s):  
Leonard Lazar
Keyword(s):  
Capital Gains ◽  
Capital Gains Tax

THE IMPACT OF THE CAPITAL GAINS TAX ON BOND YIELDS

1973 ◽  
Vol 26 (4) ◽  
pp. 575-583
Author(s):  
JOHN S. McCALLUM
Keyword(s):  
Capital Gains ◽  
Capital Gains Tax ◽  
Bond Yields ◽  
The Impact
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