We develop a dynamic general equilibrium model to study the impact of the 2003 dividend and capital gains tax cuts. In … adjustment costs, equity issuance costs, and collateral constraints. We show that when the dividend and capital gains tax cuts … are unexpected and permanent, dividend payments, equity issuance, and aggregate investment rise immediately. By contrast …

retaining earnings. This alternative view holds that while changes in the dividend tax rate will affect shareholder wealth, they … these two views of dividend taxation. By extending Tobin's "q" theory of investment to incorporate taxes at both the … time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial …

This paper tests whether the 2003 dividend tax cut--one of the largest reforms ever to a U.S. capital tax rate … models in which dividend tax reforms affect the cost of capital. Either way, it may be difficult to implement an alternative … dividend tax cut that has substantially larger near-term effects …

We empirically document that stock prices moved inversely with dividend yields during the May, 1997 week, when the … share prices of other firms. Among firms paying dividends, the change in share prices was decreasing in dividend yields. The …

dividend income and that on accruing capital gains. It describes the construction of weighted average marginal tax rate series … impact of this change on payout depends on the elasticity of dividend payments with respect to the after-tax value of … dividend income relative to capital gains. Time series estimates suggest an elasticity of more than three, and imply that the …

explanation for the heretofore puzzling finding that, following the unprecedented 2003 reduction in dividend tax rates, non-dividend …-paying firms outperformed dividend-paying firms. Not surprisingly, we find that non-dividend-paying firms are more financial … constrained than dividend-paying firms are. When a firm's financial constraint and dividend choice are jointly considered, we find …

Recent empirical studies of dividend taxation have found that: (1) dividend tax cuts cause large, immediate increases … in dividend payouts, and (2) the increases are driven by firms with high levels of shareownership among top executives or … the board of directors. These findings are inconsistent with existing "old view" and "new view" theories of dividend …

Miller and Scholes show that under certain conditions the Federal Income tax taxes dividend income at a rate no higher … can occur apply to less than 3% of dividend income and no significant role can be ascribed to their result in the … determination of corporate dividend policy …

), announcements of new investments, share repurchases, and dividend announcements. We find that 4% of public firms in our sample …