Enacting Dividend Exemption and Tax Revenue

Dividend Tax Capitalization and Liquidity

We provide a new explanation for cross-sectional variation in dividend tax capitalization. Our analysis is twofold. First, we conduct a theoretical analysis that shows that liquidity (illiquidity) mitigates (magnifies) the positive effect of dividend taxes on expected rates of return documented in prior literature. Second, we conduct an empirical analysis centered around the Jobs and Growth Tax...

Internal Revenue Service General Counsel's Memorandum threatens tax exemption for charitable hospitals.

A recent memorandum from the General Counsel of the Internal Revenue Service changes the standard against which tax exempt entities will be measured, which change can adversely affect charitable hospitals' tax exempt status. In addition, the memorandum makes clear that a violation of the Anti-Kickback statute, discussed in Mr. Aaron's article, is inconsistent with tax exempt status.

Property tax exemption for nonprofit hospitals.

This article discusses management practices that hospital administrators can use to minimize the exposure to property taxation. First, the results of a national survey on the extensiveness of property tax exemption are reviewed. Next, a review of the history of recent developments in Utah is presented, including the recent ruling of the Utah State Supreme Court that "nonprofit" status does not ...

Tax exemption in a reformed healthcare system.

The Value of Dividend Imputation Tax Credits

A dividend imputation tax system provides shareholders with a tax credit that can be used to offset personal tax on dividend income. The size of this credit depends on tax paid at the corporate level so that the “double taxation” of dividends is effectively eliminated. This paper shows how to infer the value of imputation tax credits (which is an important input into the weighted-average cost o...