TY  - JOUR
AU  - Gourio,Francois
AU  - Miao,Jianjun
TI  - Firm Heterogeneity and the Long-run Effects of Dividend Tax Reform
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15044
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15044
L1  - http://www.nber.org/papers/w15044.pdf
N1  - Author contact info:
Francois Gourio
Department of Economics
Boston University
270 Bay State Road
Boston, MA 02215
Tel: 617/353-4534
Fax: 617/353-4449
E-Mail: fgourio@bu.edu

Jianjun Miao
Department of Economics
Boston University
270 Bay State Road
Boston MA 02215
E-Mail: miaoj@bu.edu
AB  - 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.
ER  -