The Library
Dividend and capital gains taxation under incomplete markets
Tools
Anagnostopoulos, Alexis, Cárceles-Poveda , Eva and Lin, Danmo (2012) Dividend and capital gains taxation under incomplete markets. Journal of Monetary Economics, 59 (7). pp. 599-611. doi:10.1016/j.jmoneco.2012.06.007 ISSN 0304-3932.
PDF
WRAP_JME_accepted.pdf - Accepted Version - Requires a PDF viewer. Download (720Kb) |
Official URL: http://dx.doi.org/10.1016/j.jmoneco.2012.06.007
Abstract
Motivated by the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) of 2003, the effects of capital income tax cuts are investigated in an economy with heterogeneous households and a representative, mature firm. Dividend tax cuts, contrary to capital gains tax cuts, lead to a decrease in investment and capital. This is because they increase the market value of existing capital and households require a higher return to hold this additional wealth. In line with empirical evidence, the model predicts substantial increases in dividends and stock prices. Overall, the tax cuts lead to a welfare reduction equivalent to a consumption drop of 0.5%.
Item Type: | Journal Article | ||||||
---|---|---|---|---|---|---|---|
Subjects: | H Social Sciences > HG Finance H Social Sciences > HJ Public Finance |
||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
||||||
Library of Congress Subject Headings (LCSH): | Capital gains tax, Stock exchanges, Dividends | ||||||
Journal or Publication Title: | Journal of Monetary Economics | ||||||
Publisher: | Elsevier BV | ||||||
ISSN: | 0304-3932 | ||||||
Official Date: | November 2012 | ||||||
Dates: |
|
||||||
Volume: | 59 | ||||||
Number: | 7 | ||||||
Page Range: | pp. 599-611 | ||||||
DOI: | 10.1016/j.jmoneco.2012.06.007 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||
Date of first compliant deposit: | 23 October 2016 | ||||||
Date of first compliant Open Access: | 24 October 2016 | ||||||
Adapted As: | |||||||
Open Access Version: |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |
Downloads
Downloads per month over past year