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Article: Capital gains taxes and equity prices.(Research Summaries)
- Article from:
- NBER Reporter
- Article date:
- September 22, 2004
- Author:
CopyrightCOPYRIGHT 2004 National Bureau of Economic Research, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The extent to which individual shareholders' taxes affect equity, prices is central to valuation and tax policy. Historically, the dividend tax has attracted more scholarly, attention than the capital gains tax. Even today, the debate between the traditional view and the (now not-so-new) new view continues, and studies of the 2003 reduction in the dividend tax are already emerging. (1)
Conversely, the appropriate tax on capital gains has long been hotly contested in policy circles but has received comparably little attention from scholars. This is surprising because most companies pay no dividends and those that do pay dividends typically distribute only a small ...