{"title":"Tax planning and investment responses to dividend taxation","authors":"Aliisa Koivisto","doi":"10.1007/s10797-024-09837-w","DOIUrl":null,"url":null,"abstract":"<p>This study explores empirically how business owners respond to dividend taxes in a range of different margins including tax planning and investment. Using administrative tax data on all privately held Finnish corporations, I find exceptionally clear dividend payment responses to tax rate discontinuities and changes. Studying the income composition of owners around tax changes reveals clear income shifting between wage and dividends with negligible effect on gross income received from the firm. Evidence on the asset composition of firms indicates that a notable part of the payment response is due to inter-temporal income-smoothing, while I observe no statistically significant real responses in output or investment. Heterogeneity analysis suggests that more experienced owners and owners with lower income have higher tax base elasticities.</p>","PeriodicalId":47518,"journal":{"name":"International Tax and Public Finance","volume":null,"pages":null},"PeriodicalIF":1.0000,"publicationDate":"2024-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Tax and Public Finance","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s10797-024-09837-w","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study explores empirically how business owners respond to dividend taxes in a range of different margins including tax planning and investment. Using administrative tax data on all privately held Finnish corporations, I find exceptionally clear dividend payment responses to tax rate discontinuities and changes. Studying the income composition of owners around tax changes reveals clear income shifting between wage and dividends with negligible effect on gross income received from the firm. Evidence on the asset composition of firms indicates that a notable part of the payment response is due to inter-temporal income-smoothing, while I observe no statistically significant real responses in output or investment. Heterogeneity analysis suggests that more experienced owners and owners with lower income have higher tax base elasticities.
期刊介绍：
INTERNATIONAL TAX AND PUBLIC FINANCE publishes outstanding original research, both theoretical and empirical, in all areas of public economics. While the journal has a historical strength in open economy, international, and interjurisdictional issues, we actively encourage high-quality submissions from the breadth of public economics.The special Policy Watch section is designed to facilitate communication between the academic and public policy spheres. This section includes timely, policy-oriented discussions. The goal is to provide a two-way forum in which academic researchers gain insight into current policy priorities and policy-makers can access academic advances in a practical way. INTERNATIONAL TAX AND PUBLIC FINANCE is peer reviewed and published in one volume per year, consisting of six issues, one of which contains papers presented at the annual congress of the International Institute of Public Finance (refereed in the usual way). Officially cited as: Int Tax Public Finance
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