CAPITAL TAX REFORMS WITH POLICY UNCERTAINTY

• 成果类型: Article
• 署名作者: Abraham, Arpad; Brendler, Pavel; Carceles-Poveda, Eva
• 署名单位: University of Bristol; University of Bonn; State University of New York (SUNY) System; Stony Brook University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12664
• 发表日期: 2024
• 页码: 75-116
• 关键词: dividend taxes; INVESTMENT; taxation; adjustment; cost

摘要

One important feature of capital tax reforms is the uncertainty regarding their duration. In a standard heterogeneous firm framework with financial frictions, we model policy uncertainty by assuming that reforms may be either repealed or maintained with some probability every period. We illustrate the effects of policy uncertainty in the context of the 2003 Bush tax cuts (2003 Job Growth Tax Relief Reconciliation Act), which lowered shareholder taxes. We show that policy uncertainty regarding dividend and capital gains taxes can explain why the Bush tax cuts had no statistically significant effect on investment, in line with the empirical evidence.