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Title:Neutral taxation of shareholder income?: corporate responses to an announced dividend tax PDF Logo
Authors:Alstadsæter, Annette
Fjaerli, Erik
Issue Date:2009
Series/Report no.:CESifo working paper 2530
Abstract:The introduction of the 2006 Norwegian shareholder income tax was announced in advance, and it increased top marginal tax rates on individual dividend income from zero to 28 percent. We document strong timing effects on dividend payout on a large panel of non-listed corporations, with a surge of dividends prior to 2006 and a sharp drop after. Mature firms are more likely to pay dividends, and high asset growth increases the probability of retaining all earnings. Intertemporal income shifting through the timing of dividends seems to be a drain on internal equity and cause increases in the corporations' debt-equity ratios. The debt ratios drop sharply after the implementation of the reform.
Subjects:Neutral dividend tax
dual income tax
intertemporal income shifting
anticipation effects
corporate financial policy
transition
JEL:G32
G35
H24
H25
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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