The vanishing harberger triangle
This paper shows that the double taxation of corporate dividends (or profit repatriations) implies a nucleus theory of the corporation. After the firm is set up with a small stock of original capital, it enters a phase of purely internal growth during which no dividends are paid and no shares are issued. The phase terminates when an efficient stock of capital has been accumulated and dividends are paid. During the growth phases, the tax distortion is inversely related to the tax burden and it is larger than conventional formulae for the cost of internal and external equity finance suggest.
(This abstract was borrowed from another version of this item.)
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:45:y:1991:i:3:p:271-300. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.