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An Improved Model of Dividend Tax Based on Continuous Function

Author

Listed:
  • Yan Chunning
  • Zhang Hang
  • Chen Qianqian

    (School of Management, Shanghai University, Shanghai200444, China)

  • Huang Yangxin

    (Department of Epidemiology and Biostatistics, University of South Florida, Tampa, FL 33612, USA)

Abstract

By comparing several kinds of continuous functions, a normal distribution function-based model is proposed to improve the existing Levy policy of dividend tax in this paper. The improved model is adopted to stimulate the long-term investment and contain the short-term speculation. Further, this improved model paves an avenue to overcome the deficiency on the double policy of dividend tax rate by holding stock period with one day difference and also adjust the tax revenues by controlling the parameters of the distribution function. The findings from this study suggest that the improved model with normal distribution function may provide more reasonable results based on the data from the stock market and, finally, the proper decision is discussed.

Suggested Citation

  • Yan Chunning & Zhang Hang & Chen Qianqian & Huang Yangxin, 2014. "An Improved Model of Dividend Tax Based on Continuous Function," Journal of Systems Science and Information, De Gruyter, vol. 2(6), pages 568-576, December.
    • Handle: RePEc:bpj:jossai:v:2:y:2014:i:6:p:568-576:n:8
    DOI: 10.1515/JSSI-2014-0568
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    References listed on IDEAS

    as
    1. William M. Getry & Deen Kemsley & Christopher J. Mayer, 2003. "Dividend Taxes and Share Prices: Evidence from Real Estate Investment Trusts," Journal of Finance, American Finance Association, vol. 58(1), pages 261-282, February.
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    3. Andres, Christian & Betzer, André & Goergen, Marc & Renneboog, Luc, 2009. "Dividend policy of German firms: A panel data analysis of partial adjustment models," Journal of Empirical Finance, Elsevier, vol. 16(2), pages 175-187, March.
    4. Nam, Jouahn & Wang, Jun & Zhang, Ge, 2010. "The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy," Global Finance Journal, Elsevier, vol. 21(3), pages 275-292.
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