What do firms do when dividend tax rates change? An examination of alternative payout responses

• 成果类型: Article
• 署名作者: Hanlon, Michelle; Hoopes, Jeffrey L.
• 署名单位: Massachusetts Institute of Technology (MIT); University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.06.004
• 发表日期: 2014
• 页码: 105-124
• 关键词: dividend taxes; payout policy; SPECIAL DIVIDENDS

摘要

This paper investigates whether investor-level taxes affect corporate payout policy decisions. We predict and find a surge of special dividends in the final months of 2010 and 2012, immediately before individual-level dividend tax rates were expected to increase. We also find evidence that immediately before the expected tax increases, firms altered the timing of their regular dividend payments by shifting what would normally be January regular dividend payments into the preceding December. To our knowledge this is the first evidence in the literature about changes in the timing of regular dividend payments in response to tax law changes. For both actions (specials and shifting), we find that it was more likely for a firm to respond to individual-level tax rates if insiders owned a relatively large amount of the firm. Overall, our paper provides evidence that managers consider individual-level taxes in making corporate payout decisions. (C) 2014 Elsevier B.V. All rights reserved.