The Initial Impact of the 2003 Reduction in the Dividend Tax Rate

2003 ◽  
Author(s):  
Jennifer L. Blouin ◽  
Jana Smith Raedy ◽  
Douglas A. Shackelford
Keyword(s):  
Tax Rate ◽  
Dividend Tax

Foreign Portfolio Investment and Shareholder Dividend Taxes

2015 ◽  
Vol 91 (3) ◽  
pp. 717-740 ◽  
Author(s):  
Dan Amiram ◽  
Mary Margaret Frank
Keyword(s):  
Empirical Support ◽  
Weighted Average ◽  
Risky Assets ◽  
Foreign Portfolio Investment ◽  
Tax Rate ◽  
Portfolio Holdings ◽  
International Setting ◽  
National Tax ◽  
Dividend Tax ◽  
Dividend Taxes

ABSTRACT We investigate the effects of dividend taxes on foreign equity portfolio holdings. Based on the extension of an equilibrium model with risky assets to an international setting, we predict that a change in the tax rate on dividends of a country's domestic investors is positively related to changes in foreign investors' portfolio holdings in that country. The evidence from two research settings, which exploit changes in the national tax policies of different countries, supports this prediction. More generally, the model predicts that a foreign investor's equilibrium portfolio holdings in a country are negatively related to the dividend tax rate that she directly pays on assets in that country and positively related to the weighted-average dividend tax rate of worldwide investors in that country. Results from analyses using panel data provide empirical support for these predictions.

The Effect of Taxes on Conventional Preferred Stock: Evidence from the 2003 JGTRRA Dividend Tax Reduction

2012 ◽  
Vol 34 (1) ◽  
pp. 87-111 ◽  
Author(s):  
Amy Dunbar ◽  
Stanley Veliotis
Keyword(s):  
Data Availability ◽  
Matched Pair ◽  
Experimental Setting ◽  
Tax Rate ◽  
Preferred Stock ◽  
Tax Relief ◽  
Tax Reduction ◽  
Tax Returns ◽  
Quasi Experimental ◽  
Dividend Tax

ABSTRACT This study examines the extent to which investor-level taxes affect the pricing and pre-tax returns of securities. Specifically, we investigate whether the pre-tax yield on outstanding conventional preferred stock (CPS) decreased after the 2003 Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) reduced the individual's tax rate on dividends. Our research design for detecting tax effects is strong for two reasons: (1) JGTRRA provides a quasi-experimental setting that permits a pre/post design, and (2) we use trust preferred stock (TPS) issued by the same firm as the tax-disfavored benchmark asset, which permits a matched-pair design that controls for risk. Additional tests including CPS issues without TPS counterparts confirm the effect of JGTRRA on CPS issues. The results indicate that investors reacted to the new tax-favored status of CPS by bidding up its price, which lowered its yield. Data Availability:  All data are available from public sources identified in the paper.

scholarly journals An Improved Model of Dividend Tax Based on Continuous Function

2014 ◽  
Vol 2 (6) ◽  
pp. 568-576
Author(s):  
Chunning Yan ◽  
Hang Zhang ◽  
Qianqian Chen ◽  
Yangxin Huang
Keyword(s):  
Distribution Function ◽  
Continuous Function ◽  
Normal Distribution ◽  
Continuous Functions ◽  
Normal Distribution Function ◽  
Short Term ◽  
Tax Rate ◽  
Improved Model ◽  
Dividend Tax

AbstractBy comparing several kinds of continuous functions, a normal distribution function-based model is proposed to improve the existing Levy policy of dividend tax in this paper. The improved model is adopted to stimulate the long-term investment and contain the short-term speculation. Further, this improved model paves an avenue to overcome the deficiency on the double policy of dividend tax rate by holding stock period with one day difference and also adjust the tax revenues by controlling the parameters of the distribution function. The findings from this study suggest that the improved model with normal distribution function may provide more reasonable results based on the data from the stock market and, finally, the proper decision is discussed.

The composite dividend tax rate

2018 ◽  
Vol 48 (7) ◽  
pp. 727-758 ◽  
Author(s):  
Deen Kemsley ◽  
Padmakumar Sivadasan ◽  
Venkat Subramaniam
Keyword(s):  
Tax Rate ◽  
Dividend Tax

Tax Avoidance at Public Corporations Driven by Shareholder Taxes: Evidence from Changes in Dividend Tax Policy

2018 ◽  
Vol 94 (5) ◽  
pp. 27-55 ◽  
Author(s):  
Dan Amiram ◽  
Andrew M. Bauer ◽  
Mary Margaret Frank
Keyword(s):  
Fixed Effects ◽  
Tax Avoidance ◽  
Effective Tax Rate ◽  
Lower Growth ◽  
Cross Sectional ◽  
Tax Rate ◽  
Public Corporations ◽  
Foreign Countries ◽  
Shareholder Taxes ◽  
Dividend Tax

ABSTRACT We exploit changes in a country's integration of corporate and shareholder taxes to identify the effect of investor-level taxes on costly corporate tax avoidance. Specifically, we rely on European countries eliminating imputation systems in different years in response to supranational judicial rulings. These eliminations, which are exogenous to the firm, remove managers' disincentive to engage in tax avoidance if they consider investor-level taxes. Using a difference-in-differences model with fixed effects, we find that the average firm affected by an elimination reduces its cash effective tax rate by 5.5 percent. Placebo tests support that this effect exists only for countries and years for which eliminations occur. Consistent with our cross-sectional predictions, we find that results are stronger for firms with lower growth opportunities, higher dividend payout, lower foreign income, and higher closely held ownership. Further analysis provides evidence consistent with shifting income to foreign countries as one method of tax avoidance. JEL Classifications: G38; G32; G15; H26.

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