Firm heterogeneity and the long-run effects of dividend tax reform
Date
2010-01-01
Authors
Gourio, Francois
Miao, Jianjun
Version
Published version
OA Version
Citation
F. Gourio, J. Miao. 2010. "Firm Heterogeneity and the Long-run Effects of Dividend Tax Reform" American Economic Journal: Macroeconomics, Volume 2, Issue 1, pp.131-168. https://doi.org/10.1257/mac.2.1.131
Abstract
To study the long-run effect of dividend taxation on aggregate capital accumulation, we build a dynamic general equilibrium model in which there is a continuum of firms subject to idiosyncratic productivity shocks. We find that a dividend tax cut raises aggregate productivity by reducing the frictions in the reallocation of capital across firms. Our baseline model simulations show that when both dividend and capital gains tax rates are cut from 25 and 20 percent, respectively, to the same 15 percent level permanently, the aggregate long-run capital stock increases by about 4 percent. (JEL D21, E22, E62, G32, G35, H25, H32)
Description
License
Copyright © 2010 by the American Economic Association. https://www.aeaweb.org/journals/policies/copyright