Tax Cut (tax + cut)

Distribution by Scientific Domains

Kinds of Tax Cut

  • dividend tax cut


  • Selected Abstracts


    How Did the 2003 Dividend Tax Cut Affect Stock Prices?

    FINANCIAL MANAGEMENT, Issue 4 2008
    Gene Amromin
    We test the hypothesis that the 2003 dividend tax cut boosted US stock prices and thereby lowered the cost of equity capital. Using an event-study methodology, we attempt to identify an aggregate stock market effect by comparing the behavior of US common stock prices with that of foreign equities and the equities of real estate investment trusts (REITs). We also examine the relative cross-sectional response of prices of high- and low-dividend-paying stocks. We do not find any imprint of the dividend tax cut news on the value of the aggregate US stock market. On the other hand, high-dividend stocks outperformed low-dividend stocks by a few percentage points over the event windows, suggesting that the tax cut may have induced asset reallocation within equity portfolios. Finally, the positive abnormal return on nondividend paying US stocks in 2003 does not appear to be tied to tax cut news. [source]


    Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut

    THE JOURNAL OF FINANCE, Issue 4 2007
    JEFFREY R. BROWN
    ABSTRACT We test whether executive stock ownership affects firm payouts using the 2003 dividend tax cut to identify an exogenous change in the after-tax value of dividends. We find that executives with higher ownership were more likely to increase dividends after the tax cut in 2003, whereas no relation is found in periods when the dividend tax rate was higher. Relative to previous years, firms that initiated dividends in 2003 were more likely to reduce repurchases. The stock price reaction to the tax cut suggests that the substitution of dividends for repurchases may have been anticipated, consistent with agency conflicts. [source]


    Framing U.S. Redistributive Policies: Tough Love for Poor Women and Tax Cuts for Seniors

    ANALYSES OF SOCIAL ISSUES & PUBLIC POLICY, Issue 1 2009
    Wendy M. Limbert
    In recent years, income inequality in the U.S. has risen to historically high levels. Redistributive policies that differentially benefit lower- versus upper-income households play a significant role in the widening economic gap. A discourse analysis of 284 articles from five major U.S. newspapers was conducted to examine dominant media framing of the Bush administration's welfare reauthorization proposal and the 2003 dividend tax cuts. Guided by critical theory (Delgado & Stefancic, 2001;,Wing, 1997), we found that dominant issue frames favored reduced support for progressive welfare policies and increased support for tax cuts. Implications for pursuing an economic justice agenda are discussed. [source]


    How Did the 2003 Dividend Tax Cut Affect Stock Prices?

    FINANCIAL MANAGEMENT, Issue 4 2008
    Gene Amromin
    We test the hypothesis that the 2003 dividend tax cut boosted US stock prices and thereby lowered the cost of equity capital. Using an event-study methodology, we attempt to identify an aggregate stock market effect by comparing the behavior of US common stock prices with that of foreign equities and the equities of real estate investment trusts (REITs). We also examine the relative cross-sectional response of prices of high- and low-dividend-paying stocks. We do not find any imprint of the dividend tax cut news on the value of the aggregate US stock market. On the other hand, high-dividend stocks outperformed low-dividend stocks by a few percentage points over the event windows, suggesting that the tax cut may have induced asset reallocation within equity portfolios. Finally, the positive abnormal return on nondividend paying US stocks in 2003 does not appear to be tied to tax cut news. [source]


    Supply-Side Economics of Germany's Year 2000 Tax Reform: A Quantitative Assessment

    GERMAN ECONOMIC REVIEW, Issue 2 2003
    Holger Strulik
    Tax reform; corporate finance; investment; growth; welfare; Germany Abstract. The paper provides an assessment of supply-side economics following Germany's year 2000 tax reform. Investigated are a corporate tax cut, deteriorating depreciation allowances and imputation rules, and a private income tax cut. For this purpose, a neoclassical growth model is augmented by various fiscal policy parameters and endogenous corporate finance and calibrated with German data. The model is used to evaluate consequences of Germany's tax reform on production, firm finance and leverage, investment, consumption and welfare of a representative household. [source]


    Expansionary Fiscal Shocks and the US Trade Deficit,

    INTERNATIONAL FINANCE, Issue 3 2005
    Christopher J. Erceg
    In this paper, we use a dynamic general equilibrium model of an open economy to assess the quantitative effects of fiscal shocks on the trade balance in the United States. We examine the effects of two alternative fiscal shocks: a rise in government consumption, and a reduction in the labour income tax rate. Our salient finding is that a fiscal deficit has a relatively small effect on the US trade balance, irrespective of whether the source is a spending increase or tax cut. In our benchmark calibration, we find that a rise in the fiscal deficit of 1 percentage point of gross domestic product (GDP) induces the trade balance to deteriorate by 0.2 percentage point of GDP or less. Noticeably larger effects are only likely to be elicited under implausibly high values of the short-run trade price elasticity, or of the share of liquidity-constrained households in the economy. From a policy perspective, our analysis suggests that even reducing the current US fiscal deficit (of 3% of GDP) to zero would be unlikely to narrow the burgeoning US trade deficit significantly. [source]


    Campaigning Against Government in the Old Dominion: State Taxation, State Power, and the Virginia 1997 Gubernatorial Election

    POLITICS & POLICY, Issue 3 2002
    Stephen J. Farnsworth
    James S. Gilmore III (R) credited his election in 1997 as governor of Virginia to his attacks upon the size and taxation authority of state government, a twist on recent Republican attacks upon the size and taxation authority of the national government. Gilmore's plan to eliminate the personal property tax for nearly all cars and trucks was also seen as the key to his victory by independent analysts and by Virginia legislators. This quantitative analysis finds, however, that Gilmore's support was primarily the result of partisan orientations, evaluations of his character, the performance of the incumbent Republican gubernatorial administration, and background measures like the respondent's education and age. Variables that measured an individual's interest in smaller state government, his or her knowledge of which candidate proposed the car tax cut, and the importance he or she placed on tax issues did not achieve statistical significance. [source]


    Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut

    THE JOURNAL OF FINANCE, Issue 4 2007
    JEFFREY R. BROWN
    ABSTRACT We test whether executive stock ownership affects firm payouts using the 2003 dividend tax cut to identify an exogenous change in the after-tax value of dividends. We find that executives with higher ownership were more likely to increase dividends after the tax cut in 2003, whereas no relation is found in periods when the dividend tax rate was higher. Relative to previous years, firms that initiated dividends in 2003 were more likely to reduce repurchases. The stock price reaction to the tax cut suggests that the substitution of dividends for repurchases may have been anticipated, consistent with agency conflicts. [source]


    Weakening of one more alcohol control pillar: a review of the effects of the alcohol tax cuts in Finland in 2004

    ADDICTION, Issue 4 2009
    Pia Mäkelä
    ABSTRACT Aims To review the consequences of the changes in Finnish alcohol policy in 2004, when quotas for travellers' tax-free imports of alcoholic beverages from other European Union (EU) countries were abolished, Estonia joined the EU and excise duties on alcoholic beverages were reduced in Finland by one-third, on average. Design A review of published research and routinely available data. Setting Finland. Measurements Prices of alcoholic beverages, recorded and unrecorded alcohol consumption, data on criminality and other police statistics, alcohol-related deaths and hospitalizations, service use. Findings Alcohol consumption increased 10% in 2004, clearly more than in the early 2000s. With few exceptions, alcohol-related harms increased. Alcohol-induced liver disease deaths increased the most, by 46% in 2004,06 compared to 2001,03, which indicates a strong effect on pre-2004 heavy drinkers. Consumption and harms increased most among middle-aged and older segments of the population, and harms in the worst-off parts of the population in particular. Conclusions Alcohol taxation and alcohol prices affect consumption and related harms, and heavy drinkers are responsive to price. In Finland in 2004, the worst-off parts of the population paid the highest price in terms of health for cuts in alcohol prices. The removal of travellers' import quotas, which was an inherent part of creating the single European market, had serious public health consequences in Finland. [source]


    Inequality and two decades of British tax and benefit reforms

    FISCAL STUDIES, Issue 2 2004
    Tom Clark
    Abstract Microsimulation methods are used to identify the contribution of tax and benefit reforms to the significant growth in UK income inequality since 1979. The total effect turns out to depend crucially on the counterfactual against which the reforms are assessed: compared with the alternative of pure price-indexation, the total effect of reform is small; by contrast, compared with a counterfactual in which benefits rose in line with national income (historically the case before 1979), the effect is substantial , approximately half the total rise in income inequality is explained. The impact of reforms on inequality has varied significantly over time: income tax cuts in the late 1970s and late 1980s increased inequality; direct tax rises in the early 1980s and 1990s, together with increases in means-tested benefits in the late 1990s, reduced it. The robustness of the results to sampling variation and to the measure of inequality used is also investigated. [source]


    Natural Disaster Insurance and the Equity-Efficiency Trade-Off

    JOURNAL OF RISK AND INSURANCE, Issue 1 2008
    Pierre Picard
    This article investigates the role of private insurance in the prevention and mitigation of natural disasters. We characterize the equity-efficiency trade-off faced by the policymakers under imperfect information about individual prevention costs. It is shown that a competitive insurance market with actuarial rate making and compensatory tax-subsidy transfers is likely to dominate regulated uniform insurance pricing rules or state-funded assistance schemes. The model illustrates how targeted tax cuts on insurance contracts can improve the incentives to prevention while compensating individuals with high prevention costs. The article highlights the complementarity between individual incentives through tax cuts and collective incentives through grants to the local jurisdictions where risk management plans are enforced. [source]


    Budgeting during a Recession Phase of the Business Cycle: The Georgia Experience

    PUBLIC BUDGETING AND FINANCE, Issue 2 2003
    Thomas P. Lauth
    This article describes the impact of the nation-wide recession on Georgia revenue and spending decisions in the 2002 and 2003 fiscal years. The state's strong economy and conservative revenue estimating practices historically provided a hedge against revenue shortfalls during a recession phase of the business cycle. However, when state revenue collections for FY 2002 were 5 percent less than collections for the prior fiscal year, several gap-closing measures became necessary, including state agency spending reductions and substitution of bond proceeds for tax revenues. These revenue and expenditure gap-closing measures were intended to enable the governor to achieve his policy initiatives while maintaining a balanced budget. The state's Rainy Day Fund remained full and was held in reserve for budget balancing in FY 2004, if necessary. Budget balancing during the current recession has been made possible by the state's practice of not overcommitting to program increases and tax cuts during the expansion phase of the business cycle, and by effectively framing the issue of fiscal restraint. [source]


    Taking ,Big Government Conservatism' Seriously?

    THE POLITICAL QUARTERLY, Issue 1 2008
    The Bush Presidency Reconsidered
    This article reflects on the ongoing debate about the ideological direction of the Bush presidency and what it means for the future of US conservatism in domestic policy. The paper considers the dual nature of US conservatism and then goes on to explore the ,conservative promise' of the 2000 presidential election and the debate over what critiques of the Bush administration have come to call ,big government conservatism'. Finally, the article studies two examples of how this alleged ,big government conservatism' has been manifested. First, the article contemplates the administration's fiscal policy. Second it looks at the 2003 reform of the Medicare system. We argue that, although these two cases provide some ground to the idea of ,big government conservatism', in the end this phenomenon does not add up to a coherent policy vision. Overall, beyond tax cuts, the Bush administration has failed to implement a bold conservative agenda. [source]


    Framing U.S. Redistributive Policies: Tough Love for Poor Women and Tax Cuts for Seniors

    ANALYSES OF SOCIAL ISSUES & PUBLIC POLICY, Issue 1 2009
    Wendy M. Limbert
    In recent years, income inequality in the U.S. has risen to historically high levels. Redistributive policies that differentially benefit lower- versus upper-income households play a significant role in the widening economic gap. A discourse analysis of 284 articles from five major U.S. newspapers was conducted to examine dominant media framing of the Bush administration's welfare reauthorization proposal and the 2003 dividend tax cuts. Guided by critical theory (Delgado & Stefancic, 2001;,Wing, 1997), we found that dominant issue frames favored reduced support for progressive welfare policies and increased support for tax cuts. Implications for pursuing an economic justice agenda are discussed. [source]