{"id":10,"date":"2007-10-27T15:16:14","date_gmt":"2007-10-27T19:16:14","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/guan\/2007\/10\/27\/double-taxation-of-dividends\/"},"modified":"2007-10-27T15:16:14","modified_gmt":"2007-10-27T19:16:14","slug":"double-taxation-of-dividends","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/guan\/2007\/10\/27\/double-taxation-of-dividends\/","title":{"rendered":"Double taxation of dividends"},"content":{"rendered":"<p>Alan Viard <a href=\"http:\/\/blogs.wsj.com\/economics\/2007\/10\/26\/tax-code-overhaul-good-or-bad-economics\/\">writes<\/a> (HT: <a href=\"http:\/\/gregmankiw.blogspot.com\/2007\/10\/mother-of-all-tax-reforms.html\">Greg Mankiw<\/a>):<\/p>\n<blockquote><p>Another bad provision: the bill would increase the tax on intercorporate dividends, where one corporation holds stock in another corporation [except] if it\u2019s like a wholly owned subsidiary. That makes no sense. It says the tax burden on investment will depend on how many corporate layers there happens to be. There\u2019s no rational distinction, no efficiency gain, no equity gain in taxing that more heavily.<\/p><\/blockquote>\n<p>I don&#8217;t think this is completely accurate, Double taxation of dividends in the United States is an important reason why public companies in the US are directly controlled by shareholders, not by minority shareholders through labyrinthine cross holdings. See <a href=\"http:\/\/www.ingentaconnect.com.ezp1.harvard.edu\/content\/aea\/jep\/2005\/00000019\/00000003\/art00009\">Morck and Yeung (2005)<\/a> (<a href=\"http:\/\/www.stern.nyu.edu\/~byeung\/dividend_taxation.pdf\">working paper version<\/a>). We can discuss how much double taxation there should be, but I think Viard overstates his case when he writes that there is \u201cno equity gain\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alan Viard writes (HT: Greg Mankiw): Another bad provision: the bill would increase the tax on intercorporate dividends, where one corporation holds stock in another corporation [except] if it\u2019s like a wholly owned subsidiary. That makes no sense. It says the tax burden on investment will depend on how many corporate layers there happens to [&hellip;]<\/p>\n","protected":false},"author":1524,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/posts\/10","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/users\/1524"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/comments?post=10"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/posts\/10\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/media?parent=10"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/categories?post=10"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/guan\/wp-json\/wp\/v2\/tags?post=10"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}