SIFR Research Report Series, Institute for Financial Research
Direct Evidence of Dividend Tax Clienteles
(), Göran Robertsson
() and Kristian Rydqvist
Abstract: We study a large data set of stock portfolios held by
individuals and organizations in the Swedish stock market. The dividend
yields on these port-folios are systematically related to investors'
relative tax preferences for dividends versus capital gains. Tax-neutral
investors earn 40 basis points higher dividend yield on their portfolios
than investors which face higher effective taxation of dividends than
capital gains. We conclude that there are dividend tax clienteles in the
market. We also argue that the abundant portfolio holdings by private
corporations, despite triple taxation at a combined marginal tax rate as
high as 77.5%, is a consequence of taxation.
Keywords: Tax incidence; dividend tax clienteles; capital gains tax; stock ownership; (follow links to similar papers)
JEL-Codes: G11; G35; (follow links to similar papers)
34 pages, March 15, 2007
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