In this study, we examine the impact of dividend and capital gains taxes on dividendincrease announcement returns. Consistent with Bernheim and Wantz (1995), we find dividend announcement returns increase in the dividend tax rate. In contrast to existing signaling models, however, we also find robust evidence that dividend announcement returns increase in the capital gains tax rate. This anomal...

Theory predicts that strategically-determined tax rates induce negative externalities across countries in relative prices, the wealth distribution and tax revenue. This paper studies the interaction of these externalities in a dynamic, general equilibrium environment and its effects on quantitative outcomes of tax competition in one-shot games over capital income taxes between two governments t...

Abstract We examine the effect of staggered changes in state-level capital gains tax on venture (VC)-backed start-ups and show that an increase rate VC firms reduces quantity quality patents by start-ups. The results are consistent with a reduction firms’ incentives to provide effort: increases for lead incrementally lower innovation exchanges between firm’s portfolio. also decrease level inves...

This text surveys the literature on the implications of international capital mobility for national tax policies. Our main issue for consideration in this survey is whether taxation of income, specifically capital income will survive, how border crossing investment is taxed relative to domestic investment and whether welfare gains can be achieved through international tax coordination. Our anal...

Dividends are taxed at both the corporate and personal levels in the United States. This double taxation of dividends may distort investment efficiency. Partly motivated by this consideration, the US Congress enacted the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) in 2003. This act reduced the tax rates on dividends and capital gains, and eliminated the wedge between these two tax ra...

Taxes have major costs beyond the collected revenue: deadweight from distorted incentives, compliance and enforcement costs, etc. A simple market mechanism, the Equity Tax, avoids these problems for the trickiest cases: corporate, dividend, and capital gains taxes. It exploits the ability of the share prices to reflect the expected true annual return (as perceived by investors, not as defined b...

We argue the revenue potential from increasing tax rates on capital gains may be substantially greater than previously understood. First, many prior studies focus primarily short-run taxpayer responses, and so miss that are deferred when change. Second, composition of has shifted in recent years, such share highly elastic to rate likely declined. Third, focusing collection understate fiscal spi...