Taxation and the Evolution of Aggregate Corporate Ownership Concentration
Abstract
Legal rules, politics and behavioral factors have all been emphasized as explanatory factors in analyses of the determinants of the concentration of corporate ownership and stock market participation. An extension of standard tax clientele arguments demonstrates that changes in the progressivity of taxes can also significantly influence patterns of equity ownership. A novel index of the concentration of corporate ownership over the twentieth century in the U.S. provides the opportunity to quantitatively test for the role of taxes in shaping ownership concentration. The index of ownership concentration is characterized by considerable time series variation, with significant diffusion of ownership in the post WWII era and reconcentration in the late 1990s. Analysis of this index indicates that the progressivity of taxation significantly influences corporate ownership concentration and equity market participation as predicted by the model. This evidence supports the intuition of Berle and Means (1932) that taxation can significantly influence patterns of equity ownership.Download Info
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11469.Length:
Date of creation: Jul 2005
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Handle: RePEc:nbr:nberwo:11469
Note: CF PE
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Keywords:Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-03 (All new papers)
- NEP-FIN-2005-07-03 (Finance)
- NEP-PBE-2005-07-03 (Public Economics)
- NEP-PUB-2005-07-03 (Public Finance)
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- RĂ¼nger, Silke, 2011. "The effect of Germany's Tax Reform Act 2001 on corporate ownership: Insights from disposals of minority blocks," arqus Discussion Papers in Quantitative Tax Research 114, arqus - Arbeitskreis Quantitative Steuerlehre.
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