The share price effects of dividend taxes and tax imputation credits

• 成果类型: Article
• 署名作者: Harris, TS; Hubbard, RG; Kemsley, D
• 署名单位: Columbia University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(00)00076-1
• 发表日期: 2001
• 页码: 569-596
• 关键词: dividend puzzle; dividend taxes; cost of capital

摘要

We examine the hypothesis that dividend taxes are capitalized into share prices by focusing on investors' implicit valuations of retained earnings Versus paid-in equity. Retained earnings are distributable as taxable dividends, whereas paid-in equity is distributable as a tax-free return of capital. Consistent with dividend tax capitalization, firm-level results for the United States indicate that accumulated retained earnings are valued less per unit than contributed capital. In addition, differences in dividend tar rates across U.S. tax regimes are associated with predictable differences in the magnitude of the implied tax discount for retained earnings, as are differences in dividend tax rates across Australia, Japan, France, Germany, and the United Kingdom. (C) 2001 Elsevier Science B.V. All rights reserved.