부산대학교 도서관

Recent literature has estimated that the 2003 dividend tax cut caused a large in-crease in aggregate dividend layouts, which would imply that dividend taxation creates large efficiency costs relative to the amount of revenue raised. I document that dividend layouts by real estate investment trusts also rose sharply following the tax cut, even though REIT dividends did not qualify for the cut. Using REITs as a control group in a simple difference-in-differences framework produces small and statistically insignificant estimates of the effect of the tax cut on aggregate dividend layouts. I further document that the ratio of dividend layouts to corporate earnings changed little after the tax cut, and that the ratio of dividend layouts to share repurchases fell dramatically. These facts suggest that contemporaneous increases in earnings and investor demand for layouts drove the observed increases in aggregate dividend layouts, with at most a modest role for the tax cut. [ABSTRACT FROM AUTHOR]