Effects of Dividend Relief on Economic Growth, the Stock Market, and Corporate Tax Preferences
Dividend relief was proposed for economic stimulus and growth, but is unlikely to be an effective stimulus because much of the tax benefit may be saved. Nor is it likely to affect demand independently through a rise in the stock market: these values only affect pending of stockholders (through income effects). Even if there is a separate effect on consumer or business confidence, the effect on the stock market is unlikely to be large enough to be noticeable. A deficit-financed capital income tax cut would, however, ultimately reduce the capital stock.
Volume (Year): 56 (2003)
Issue (Month): 3 (September)
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- Harris, T.S. & Glenn Hubbard, R. & Kemsley, D., 2000.
"The Share Price Effects of Dividend Taxes and Tax Imputation Credits,"
00-02, Columbia - Graduate School of Business.
- Trevor S. Harris & R. Glenn Hubbard & Deen Kemsley, 1999. "The Share Price Effects of Dividend Taxes and Tax Imputation Credits," NBER Working Papers 7445, National Bureau of Economic Research, Inc.
- Engen, Eric M. & Gravelle, Jane G. & Smetters, Kent, 1997. "Dynamic Tax Models: Why They Do the Things They Do," National Tax Journal, National Tax Association, vol. 50(3), pages 657-82, September.
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