scholarly journals Individual Investors’ Dividend Taxes and Corporate Payout Policies

2017 ◽  
Vol 52 (3) ◽  
pp. 963-990 ◽  
Author(s):  
Oliver Zhen Li ◽  
Hang Liu ◽  
Chenkai Ni ◽  
Kangtao Ye
Keyword(s):  
Tax Reform ◽  
Tax Law ◽  
Individual Investors ◽  
Tax Rates ◽  
Minority Shareholders ◽  
Dividend Payout ◽  
Controlling Shareholders ◽  
Trading Activities ◽  
Dividend Tax ◽  
Dividend Taxes

The 2012 Dividend Tax Reform in China ties individual investors’ dividend tax rates to the length of their shareholding period. We find that firms facing a reduction (increase) in their individual investors’ dividend tax rates are more (less) likely to increase dividend payout. Such an effect is concentrated in firms where incentives of controlling shareholders and minority shareholders are aligned. Furthermore, investors respond to this tax law change by reducing trading activities before the cum-dividend day and successfully lower their dividend tax penalty. Overall, our evidence enhances the notion that individual investors’ tax profiles shape firms’ payout policies.

Impact of Dividend Tax Change on the Payout Policy of Indian Companies

2019 ◽  
Vol 20 (5) ◽  
pp. 1282-1291
Author(s):  
Sanjay Dhamija ◽  
Ravinder Kumar Arora
Keyword(s):  
Negative Impact ◽  
Payout Policy ◽  
Tax Law ◽  
Dividend Payout ◽  
Inside Ownership ◽  
Regulatory Changes ◽  
Before And After ◽  
The Government ◽  
The Impact ◽  
Dividend Tax

The article examines the impact of regulatory changes in the tax on dividends on the payout policy of Indian companies. The tax law was recently amended to levy tax on dividends received by large shareholders. As the promoters group is the largest shareholder, this is expected to have a negative impact on the payout policy of companies. Furthermore, companies with larger promoter holdings have a higher motivation to reduce their payout. The study covers 370 companies present in the BSE 500 Index and compares the dividend payout of the companies before and after the introduction of tax levy. The study finds that the newly introduced tax indeed caused a shift in the dividend policy of companies, particularly those companies which have high levels of inside ownership. The findings have significant implications for companies, investors and the government.

The Effect of Information Complexity on Analysts' Use of That Information

2003 ◽  
Vol 78 (1) ◽  
pp. 275-296 ◽  
Author(s):  
Marlene A. Plumlee
Keyword(s):  
Tax Reform ◽  
Public Information ◽  
Tax Law ◽  
Specific Information ◽  
Information Complexity ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Case Complexity ◽  
Complex Information ◽  
The Cost

In this study I investigate the relation between information complexity and financial analysts' use of that information. I rank by complexity six tax-law changes enacted by the Tax Reform Act of 1986, and then examine analysts' explicit forecasts of effective tax rates around those changes. I show that analysts' revisions of their forecasts of effective tax rates appear to impound the effects of the less complex tax-law changes but not the more complex changes. Furthermore, as expected, if analysts assimilate less complex (but not more complex) information, the magnitude of the errors in their forecasts of effective tax rates increases with the effects of the more complex tax-law changes, but is unrelated to the less complex changes. Taken together, these results indicate that analysts assimilate less complex information to a greater extent than they assimilate more complex information. Either analysts' abilities to incorporate specific information into their forecasts is a decreasing function of the complexity of that information, or analysts choose not to assimilate complex information because the cost would exceed the benefit. In either case, complexity reduces analysts' use of information. These results demonstrate the importance of considering information attributes, such as complexity, when investigating why analysts' forecasts fail to incorporate all public information.

Dividend Policy with Controlling Shareholders

2015 ◽  
Vol 16 (1) ◽  
Author(s):  
Maribel Sáez ◽  
María Gutiérrez
Keyword(s):  
Empirical Evidence ◽  
Dividend Policy ◽  
Empirical Literature ◽  
Minority Shareholders ◽  
Dividend Payout ◽  
Controlling Shareholders ◽  
Legal Rules ◽  
Ownership Structures ◽  
Agency Conflict ◽  
Concentrated Ownership

AbstractThis Article investigates the determinants of dividend policy in firms with concentrated ownership structures. A review of the empirical literature shows that dividend payout ratios are lower in firms with controlling shareholders. We explain this finding as a consequence of the legal rules governing cash distributions, which leave the dividend decision in the hands of the firm insiders, and the lack of monitoring mechanisms for checking the power of controlling shareholders. The analysis of the empirical evidence on dividend policy points to the existence of an unresolved agency conflict between controlling shareholders and outside investors. We conclude that controlling shareholders are currently using the dividend policy to expropriate minority shareholders.

scholarly journals Machinery Replacement, Multiple Optima, and the 1986 Tax Reform Act

1988 ◽  
Vol 20 (1) ◽  
pp. 179-187 ◽  
Author(s):  
Gary D. Lynne
Keyword(s):  
Discount Rate ◽  
Tax Reform ◽  
Profit Maximization ◽  
Tax Law ◽  
First Year ◽  
Tax Rates ◽  
Marginal Tax Rates ◽  
Farm Equipment ◽  
Depreciation Schedule

AbstractThe 1986 Tax Reform Act established a first year $10,000 expensing option and, for most farm equipment, a 7-year depreciation schedule. Under a profit maximization criterion, these tax law features can lead to multiple optima dependent upon discount and marginal tax rates. For example, the economically efficient time to reinvest under a 2 percent after-tax discount rate is at 4, 8, and 30 years for the grower in a 33 percent tax bracket. Thus, the profit maximization behavioral rule needs to be supplemented with knowledge about a farmer's objectives in order to select the “correct” optimal reinvestment interval.

The Effect Of The Tax Reform Act Of 1986 On Economic Efficiency

2011 ◽  
Vol 8 (2) ◽  
pp. 62 ◽  
Author(s):  
Joseph M. Hagan ◽  
Ernest R. Larkins
Keyword(s):  
Economic Efficiency ◽  
Income Tax ◽  
Tax Reform ◽  
Tax Law ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Federal Income Tax ◽  
Income Tax Law

The Federal Income tax law was dramatically changed by the Tax Reform Act of 1986. The purpose of this study is to determine if the TRA reduced the variability of corporate effective tax rates and in turn improved economic efficiency. To determine if variability has been reduced, corporate effective tax rates were measured for 1986 and 1987. The variance of the effective tax rates was computed and tested to determine if the variability was reduced.

PENGARUH FAMILY OWNERSHIP, PERUBAHAN TARIF PAJAK DAN KEBIJAKAN HUTANG TERHADAP NILAI PERUSAHAAN

2017 ◽  
Vol 9 (2) ◽  
Author(s):  
Elfina Astrella Sambuaga
Keyword(s):  
Ownership Structure ◽  
Tax Reform ◽  
Stock Exchange ◽  
Family Ownership ◽  
Corporate Debt ◽  
Tax Rates ◽  
Manufacturing Companies ◽  
The Impact ◽  
The Relationship ◽  
Debt Policy

<p>This study aims to provide empirical evidence related to the influence of family ownership, tax reform on corporate debt policy, and further prove the impact on the firm value.This study examined the effect of changes in tax rates in 2009 and 2010 on the relationship between family ownership structure and corporate debt policy. The population of this research is manufacturing companies listed in Indonesia Stock Exchange for 8 consecutive years (2006-2013), with the period of observation for 7 years (2007-2013). A period of 8 years was taken to see a company that is consistently listed on the Stock Exchange prior to the end of the observation period. The result of this study shows that tax reform from progressive tax rates to a flat rate does not affect the relationship between family ownership structure and corporate debt policy. In contrast to the year 2009, changing rate from 28% to 25% in late 2010 was a significant effect on the debt policy with the company of family ownership. Based on the results, it was found that family ownership and debt policy significantly affect the company's enterprise value. It can be concluded, the higher the family ownership, the company's value would be diminished. Instead, the company's value will increase when the company adds to its debt policy.</p><p>Keywords : debt policy, family ownership, firm value, tax reform.</p>

ANALISIS PENGARUH TATA KELOLA PERUSAHAAN YANG BAIK TERHADAP RASIO PEMBAYARAN DIVIDEN

2007 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Eko Budi Santoso
Keyword(s):  
Corporate Governance ◽  
Investor Protection ◽  
Dividend Payout ◽  
Controlling Shareholders ◽  
Concentrated Ownership ◽  
Good Corporate Governance ◽  
Crucial Problem

Investor protection in highty concentrated ownership as in Indonesia is a crucial problem. Expropriation tends to be high in lower investor protection because controlling shareholders can implement policies that benefit themselves at the expense of outside investors. In a high expropriation, outside investors will choose dividends rather than retained earnings.This paper examines good corporate governance as a solution.for a good investor protection in Indonesia. Using a sample of 245 firms for observdion period of 2001-200j, the results slows that stronger investor ptotection related with lower dividend payout ratio.Kqtwords : Good Corporate Governance, Dividend Payout Ratio,Investor Protection, Concentrated Ownership.

Sign in / Sign up

Export Citation Format

Share Document