Taxation, Asset Bubbles, and Endogenous Growth / Besteuerung, Bubbles und Endogenes Wachstum

2002 ◽  
Vol 222 (4) ◽  
Author(s):  
Thomas Wiedmer
Keyword(s):  
Growth Rates ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Tax Reforms ◽  
Lower Growth ◽  
Asset Bubbles ◽  
Market Values ◽  
Endogenous Technical Progress ◽  
Consumption Taxes ◽  
The Impact

SummaryThis paper examines the impact of different forms of taxation on economic growth in a model with endogenous technical progress and finitely-lived agents. We find that income taxes lower growth rates (given that income tax revenue is transferred to the old), whereas consumption taxes can, contrary to results usually reported in the literature, even spur growth rates. Therefore, tax reforms aimed to be revenue neutral and growth enhancing should envisage to lower direct taxes while increasing indirect taxes. If there is a bubble in the economy, i. e. a situation where prices of assets differ from their fundamental market values, growth rates are lower since investments are diverted away from productive investments in capital. A capital gains tax, though, limits the size of the bubble and, hence, affects growth rates positively in an economy with an asset bubble. This result is in contrast to economies without asset bubbles, where a capital gains tax usually decreases growth rates.

THE IMPACT OF THE CAPITAL GAINS TAX ON BOND YIELDS

1973 ◽  
Vol 26 (4) ◽  
pp. 575-583
Author(s):  
JOHN S. McCALLUM
Keyword(s):  
Capital Gains ◽  
Capital Gains Tax ◽  
Bond Yields ◽  
The Impact

The impact of endophyte on the health and productivity of sheep grazing ryegrass-based pastures

1999 ◽  
Vol 7 ◽  
pp. 11-17
Author(s):  
L.R. Fletcher ◽  
B.L. Sutherland ◽  
C.G. Fletcher
Keyword(s):  
Perennial Ryegrass ◽  
Growth Rates ◽  
Plasma Prolactin ◽  
Sheep Grazing ◽  
Wild Type ◽  
Lower Plasma ◽  
Lower Growth ◽  
Respiration Rates ◽  
Neotyphodium Lolii ◽  
The Impact

The health and production of sheep grazing perennial ryegrass with and without wild-type endophyte (Neotyphodium lolii) has been studied in several trials over a number of years. Lambs/ hoggets grazing predominantly perennial ryegrass swards with endophyte developed moderate to severe ryegrass staggers in summer and autumn, while those grazing endophyte-free ryegrass did not. Lambs/hoggets grazing ryegrass with endophyte also had more dags, lower growth rates, lower plasma prolactin levels, higher body temperatures and respiration rates under warm humid conditions. Most of these adverse responses were more severe in summer and autumn when endophyte toxin concentrations were highest. Many of these symptoms are similar to those described for the "autumn ill thrift" syndrome in New Zealand. Keywords: dags, endophyte, flystrike, growth rates, hyperthermia, Neotyphodium, perennial ryegrass, prolactin, ryegrass staggers, sheep

Germany's Repeal of the Corporate Capital Gains Tax: The Equity Market Response

2004 ◽  
Vol 26 (s-1) ◽  
pp. 73-97 ◽  
Author(s):  
Courtney H. Edwards ◽  
Mark H. Lang ◽  
Edward L. Maydew ◽  
Douglas A. Shackelford
Keyword(s):  
Abnormal Returns ◽  
Economic Effects ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Cross Sectional ◽  
Price Response ◽  
Corporate Capital ◽  
Market Values ◽  
Lock In Effect ◽  
Lock In

In late 1999, the German government made a surprise announcement that it would repeal the large and long-standing capital gains tax on sales of corporate crossholdings effective in 2002. The repeal has been hailed as a revolutionary step toward breaking up the extensive web of crossholdings among German companies. The lock-in effect from the large corporate capital gains tax was said to act as a barrier to efficient acquisition and divestiture of German firms and divisions. Many observers predicted that once the lock-in effect was removed, Germany would experience a flurry of acquisition and divestiture activity. Several other industrialized countries were poised to follow suit, with similar proposals pending in France, Japan, and the United Kingdom. This paper provides evidence of the economic impact of the repeal by examining its effect on the market values of German firms. While event studies of tax legislation can be difficult, our study is aided by the fact that the repeal was both a surprise and was announced separately from other tax reform proposals. In addition, we provide cross-sectional evidence on the economic magnitude of the repeal, assess the likely beneficiaries from the repeal, and predict which sectors are most likely to experience a surge in acquisition and divestiture activity following the repeal. Our results suggest that the economic effects are highly concentrated. We find a positive association between firms' event period abnormal returns and the extent of their crossholdings, consistent with taxes acting as a barrier to efficient allocation of ownership. However, the reaction is limited to the six largest banks and insurers and their extensive minority holdings in industrial firms. These six large firms have a combined market capitalization equal to 22 percent of all 394 firms in this study. We also find evidence of a positive stock price response to the announcement for industrial companies held by these financial firms, consistent with shareholders in those firms benefiting from the likely reduction in investor-level tax burdens and expected increased efficiency following the tax law change.

Capital Gains Taxes and Stock Return Volatility

2013 ◽  
Vol 35 (2) ◽  
pp. 1-31 ◽  
Author(s):  
Zhonglan Dai ◽  
Douglas A. Shackelford ◽  
Harold H. Zhang
Keyword(s):  
Stock Returns ◽  
Stock Return ◽  
Cash Flows ◽  
Capital Gains ◽  
Return Volatility ◽  
Capital Gains Tax ◽  
Tax Rate ◽  
Stock Return Volatility ◽  
Capital Gains Taxes ◽  
The Impact

ABSTRACT This paper presents an empirical investigation of the impact of capital gains taxes on stock return volatility. We predict that the more stock returns are subject to capital gains taxation, the greater the increase in return volatility following a capital gains tax rate cut due to reduced risk-sharing in firms' cash flows between shareholders and the government. Consistent with this prediction, we find larger increases in the return volatility for more appreciated stocks than for less appreciated stocks and for non-dividend-paying stocks than for dividend-paying stocks after both 1978 and 1997 capital gains tax rate reductions. The findings imply that capital gains taxes convey a heretofore overlooked benefit of lower stock return volatility.

Unitisation of petroleum project interests

2015 ◽  
Vol 55 (2) ◽  
pp. 497
Author(s):  
Wee Kenneth
Keyword(s):  
Oil And Gas ◽  
Development Project ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Resource Base ◽  
Resource Rent ◽  
Petroleum Resource ◽  
Key Issues ◽  
The Impact ◽  
Fiscal Implications

Traditionally, the unitisation of oil and gas project interests involved the exchange of legal ownership interests between project proponents to achieve uniformity of their licence interests across the project. Recently, more contemporary and creative forms of unitisation have emerged including economic, beneficial and contractual unitisation approaches that do not necessarily involve the transfer of legal title interests. Unitisation is a way of pooling resources to improve the likelihood of an economically viable project for participants and to overcome practical challenges resulting from uneven interests in the component parts of a broader project. In some cases, unitisation is the catalyst for project sanction. Achieving agreement and alignment on the most equitable unitisation outcome, including the valuation of the relative resource base and ownership stakes, is not easy. It involves navigating a myriad of legal, commercial, operational and financial considerations. A project residing in both federal and state waters can add increasing layers of complexity due to the interaction between overlapping federal and state jurisdictional and taxing rights. This extended abstract discusses key issues arising in various unitisation models and considers the associated fiscal implications from income tax, capital gains tax, petroleum resource rent tax and royalty perspectives. It also examines the government’s announced tax measures for dealing with the swapping of interests or interest realignments resulting in a common development project and the impact and effectiveness of these rules on unitisation arrangements.

scholarly journals A Modified Model to Estimate Building Rental Multipiers Accounting for Advalorem Operating Expenses

2016 ◽  
Vol 24 (3) ◽  
pp. 16-26
Author(s):  
S.A. Smolyak
Keyword(s):  
Insurance Premium ◽  
Capital Gains ◽  
Property Management ◽  
Capital Gains Tax ◽  
Modified Model ◽  
Related Approach ◽  
The Subject ◽  
The Impact ◽  
Over Time ◽  
Ad Valorem

Abstract To develop ideas on building element valuation contained in the first article on the subject published in REMV, we propose an elaboration of the approach accounting for ad valorem expenses incidental to property management, such as land taxes, income/capital gains tax, and insurance premium costs; all such costs, being of an ad valorem nature in the first instance, cause circularity in the logic of the model, which, however, is not intractable under the proposed approach. The resulting formulas for carrying out practical estimation of building rental multipliers and, in consequence, of building values, turn out to be somewhat modified, and we demonstrate the sensitivity of the developed approach to the impact of these ad valorem factors. On the other hand, it is demonstrated that (accounting for) building depreciation charges, which should seemingly be included among the considered ad valorem factors, cancel out and do not have any impact on the resulting estimates. However, treating the depreciation of buildings in quantifiable economic terms as a reduction in derivable operating benefits over time (instead of mere physical indications, such as age), we also demonstrate that the approach has implications for estimating the economic service lives of buildings and can be practical when used in conjunction with the market-related approach to valuation – from which the requisite model inputs can be extracted as shown in the final part of the paper.

THE IMPACT OF TAXATION LEGISLATION DEVELOPMENTS ON NON- RESIDENTS INVESTING IN AUSTRALIAN PETROLEUM PROJECTS

1989 ◽  
Vol 29 (1) ◽  
pp. 63
Author(s):  
Colin G. Thomas ◽  
Catherine A. Hayne
Keyword(s):  
Foreign Investment ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Financial Returns ◽  
Resource Rent ◽  
Australian Capital ◽  
Petroleum Resource ◽  
The Law ◽  
The Impact ◽  
Proper Consideration

Australian legislation has recently undergone further developments which affect non- residents investing in Australian petroleum projects. The comments in this paper reflect our understanding of the law at November 1988.These legislative developments have occurred in foreign investment rules and primary tax areas such as the thin capitalisation and debt creation rules for nonresident investors, Australian capital gains tax including the new involuntary roll- over provisions, the Australian dividend imputation system, and secondary taxes such as state royalties and excises and petroleum resource rent tax.The purpose of this paper is to analyse some of the recent legislative developments from the viewpoint of a non- resident investing in Australian petroleum projects. Changes in most cases are incorporated in complex legislation, and full and proper consideration of the changes is warranted for taxpayers both to comply with the law and maximise shareholders' financial returns.

scholarly journals The Impact of Capital Gains Tax Treatments on Optimal Livestock Enterprise Selection

1980 ◽  
Vol 12 (2) ◽  
pp. 139-145
Author(s):  
John T. Pounder ◽  
Richard A. Schoney ◽  
Gustof A. Peterson
Keyword(s):  
Income Tax ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Preferential Treatment ◽  
Short Term ◽  
Tax Rate ◽  
Federal Income Tax ◽  
Gains And Losses ◽  
The Impact

Current income tax provisions bear little resemblance to those enacted by the original law, the Revenue Act of 1913. Because of the progressive nature of the federal income tax, a need for special provisions for capital gains was recognized. In 1921, gains from the sale or disposition of capital assets and certain other capital items were identified and taxed differently from income from other sources. The capital gains provisions resulted in the separation of ordinary and capital gains income.Gains and losses from the sale or exchange of a capital asset and other capital items are classified as either short- or long-term, depending on the period of time the property is held. Income from items held for less than the required period is taxed as ordinary income. Income from items held for longer than the required period receive preferential treatment only if the net long-term gain exceeds the net short-term capital loss. If long-term capital gains are realized, 60 percent of the excess gain is claimable as a deduction; the remaining 40 percent of the net gain is taxed at the taxpayer's ordinary tax rate. If the net short-term capital gain exceeds the net long-term loss, 100 percent of the excess is taxable at the normal rate.

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