外文翻译红利和资本收益的税收策略和在双重税收标准下的分红决策节选.docx

外文翻译红利和资本收益的税收策略和在双重税收标准下的分红决策节选.docx

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外文翻译红利和资本收益的税收策略和在双重税收标准下的分红决策节选

中文3000字,1800单词，9800英文字符

出处：

KariS,KarikallioH.Taxtreatmentofdividendsandcapitalgainsandthedividenddecisionunderdualincometax[J].InternationalTaxandPublicFinance,2007,14（4）:

427-456.

外文文献翻译译文

一、外文原文

原文：

Taxtreatmentofdividendsandcapitalgainsandthedividenddecisionunderdualincometax

Seppo Kari，Hanna Karikallio

Thepaperanalysesefficiencyaspectsofadualincometaxsystemwithahighertaxoncapitalgainsthandividends.Itarguesthatapartfromthedistortionstoinvestmentsclaimedinearlierliterature,thesystemputsevenmoreemphasisincreatingincentivesforentrepreneurstoparticipateintaxplanning.Thepapersuggeststhattheownerofacloselyheldcompanycanavoidallpersonaltaxesonentrepreneurialincomebytwotax-planningstrategies.Thefirstistheavoidanceofdistributions,whichwouldbetaxedatthetaxrateonlabourincome.Thesefundswouldinsteadbeinvestedinthefinancialmarkets.Thesecondstrategyisadistributeandcall-backpolicy,convertingretainedprofitsintonewequitycapital.Interestingly,theoutcomeisthatinvestmentinrealcapitalisnotdistortedinthelong-runequilibrium.Empiricalevidenceusingmicrodataisalsoprovided.

Thetaxationofdividendshasattractedrenewedattentioninpubliceconomicsliteratureinrecentyears,partlybecauseoftheUS2003taxreformwhichintroducedconsiderablecutstothetaxratesondividendincome.Severalstudieshaveusedthereformasa“natural”experimenttobringnewunderstandingontheeffectsofdividendtaxationoncorporatebehaviour.Oneoftheissuesishowthechangeintherelativetaxburdenbetweendividendsandcapitalgainsaffecteddividendpay-outbehaviour（Poterba2004;ChettyandSaez2005;GordonandDietz2006）.

Anothertopicalthemeinpubliceconomicsisincomeshiftingbetweendifferenttaxbases.WhiletheUSliteraturehasmainlyfocusedonshiftingbetweencorporateandindividualincometaxbases（GordonandSlemrod2000）,theEuropeandebatealsopaysattentiontotheincentivesgeneratedbythetaxratedifferentialsbetweenindividuallabourandcapitalincome（Sørensen2005b）.Onthebackgroundistherecenttrendtowardslownominaltaxratesoncapitalincome.

TheNordicdualincometaxation（DIT）,whichcombinesprogressivetaxationoflabourincomewithproportionaltaxoncapitalincome,hasreceivedgrowingattentionintheinternationaldebate.1Astheliteratureexplains,thereareseveraltheoreticalandpracticalargumentsinfavourofDIT.However,sincethereisalargetax-rategapbetweentheproportionalratesoncapitalincomeandthetopmarginalratesleviedonlabourincome,thesystemislikelytoprovideincentivesfortax-minimisingbehaviour.Anotherproblem,whenimplementingDIT,ishowtodealwiththefactthatentrepreneurialincomeisaresultofacombinedcontributionofcapitalandlabourinputs.Totackletheseissues,theNordiccountrieshavesetuptaxrules,amongthemtheso-calledsplittingrules,forthetaxationofownersofcloselyheldcorporations（CHC）andunincorporatedfirms.Thesesplittingrulescalculatethecapitalincomepartasanimputedreturnonthefirm’sassetsandtreattheresidualaslabourincome.

Thequestionofwhetherthetaxrulesofincome-splittinghavebehaviouralimplicationshasattractedsomeattentionamongNordictaxeconomists.HagenandSørensen（1998）provideaverbalanalysisoftheproblemandKari（1999）,Lindheetal.（2002,2004）andHietalaandKari（2006）reportontheeffectsoninvestmentdecisionsusingstandardcorporatetaxmodels.Kanniainen（2007）discussestheeffectsonentrepreneurship.Somestudieshavealsodealtwiththeissueofincome-shifting.Alstadsæter（2003）examinestheeffectsofthepreviousNorwegianDITrulesontaxplanning,especiallythechoiceoftheorganizationalform.FjærliandLund（2001）provideempiricalevidenceonincome-shiftingbetweenlabourincomeandcapitalincomebases.

Thispaperanalysesthetaxationofcloselyheldcompanies（CHC）underthevariantofDITappliedinFinlandsince1993.Itcentresontax-planning,especiallyonhowdividendsandfinancialinvestmentsshouldbearrangedtomaximiseafter-taxincomeinthelongrun.Evidenceusingalargesetofmicrodataisalsoprovided.

TheFinnishDITcombinesabroad-basedflattaxoncapitalincomewithaprogressivetaxonlabourincome（Table1）.Thetaxratedifferencebetweenthetopmarginaltaxrate（MTR）andtheproportionalcapitalincometaxratewascloseto26%in2004andevenlargerbeforethegradualMTRcutsimplementedinthelastdecade.Thereisreliefonowner-leveltaxationofdividendssothatinpracticeownersreceivenormaldividendstax-free.3Realisedcapitalgainsfromthesaleofsharesaretaxedatthenormaltaxrateoncapitalincome.DividendsreceivedfromaCHCaresplitintocapitalincomeandearnedincomebyconsideringanimputedreturnonthefirm’snetassetsascapitalincome（normaldividend）andcategorisingtheresidualasearnedincome（excessdividend）.Thepresumptiverateusedtocalculatethecapitaincomeportionofdividendswas9.6%andthecapitalbasewasdefinedastheassetsinthefirm’staxaccounts.

TheNordiccountrieshaveadopteddifferingdefinitionsofthecapitalbase（HagenandSørensen1998;Lindheetal.2002）.UndertheNorwegiangrossmethod,thebaseismeasuredasthefirm’snon-financialgrossassets.4Sweden’sapproachistodefinethebaseastheacquisitioncostoftheshares.Finlandchoseathirdalternativeanddefinesthebaseasthefirm’snetbusinessassets.TheFinnishbasethusincludesalltypesofbusinessassets,includingfinancialassets,anddeductsliabilities.Asisshowninthispaper,thisdefinitionhasinterestingimplicationsforfirmbehaviourandalsofortheefficiencyofthetaxsystem.

Besidesthesplittingsystem,anotherunconventionalfeatureoftheFinnishtaxsystemisthatithascombinedsingletaxationofdividendswithnon-relievedtaxationofcapitalgains,thelatterimplyingdoubletaxationofretainedprofits.SwedenandNorwaytookadifferentapproachintheirDITreformsintheearly1990s:

bothcountriesaimedatneutrality.WhileNorway’sstrategywastoimplementsingletaxationofbothdistributedandretainedprofits,Swedenchosetheotherextreme:

doubletaxationofboth.

Taxliteraturesuggeststhattherelativetaxburdenondistributedandretainedprofitsmayinducehigherdividenddistributions（e.g.Poterba2004;GordonandDietz2006）.Furthermore,Sinn（1987）showsittoestablishincentivesforwhathecallsadistribute-and-call-backpolicy,whereprofitsareconvertedintonewequitycapitalbydistributingthemandthencollectingthembackthroughnewshareissues.ThispaperpresentsaformalanalysisofthefinancialbehaviourofaCHCundertheFinnishdualincometax.Itarguesthatthenon-neutralitiesofthetaxsystemencourageentrepreneurstoundertaketwospecifictax-planningstrategiesbywhichtheseagentsmayavoidpersonaltaxationentirely.Capitalgainstaxationisshowntobeimportantinunderstandingtheobserveddividendbehaviour.Inthetheoreticalpart,astandarddeterministiccorporatetaxmodelisused（Auerbach1979;Sinn1987）augmentedherebyfinancialcapital.ThemodellingoftheFinnishdualincometaxcloselyfollowsKari（1999）andLindheetal.（2002）.

Observethenon-standardfeaturesoftheentiredynamicsolutiontothefirm’sproblem.Dividendsarepaidduringthe（second）realinvestmentgrowthphase,andnotonlyinthesteadystate.Inthisrespect,theoutcomediffersfromSinn（1991）,whoshowsthatunderalineardividendtaxprofitsareonlydistributedinthesteadystate.Wealsoobserveanunambiguousincentivetoinvestexcessprofitsinfinancialassets.Thefirmisnotindifferentinrespectoftheuseoffunds,butstrictlyprefersinvestmentinfinancialassets.Furthermore,nopersonaltaxesarepaidondistributedprofits.Thisisbecausetheimputationcrediteliminatestaxesonnormaldividendsandbecauseexcessdividends,subjecttoahightaxburden,areneverpaidout.

OurtheoreticalmodeladdsfinancialinvestmentstothestandardinvestmentmodelforCHCs.ThemodelpredictsthatundertheFinnishDIT,whichsplitsdividendsfromaCHCusingthefirm’snetassetsasthecapitalbase,theowneravoidstaxesonearnedincomeusingfirm-levelfinancialinvestmentsasthetax-planningvehicle.Thisisshowntoeliminatethetaxdistortiontorealinvestmentdecisionsreportedinearlierliterature.

Thefirm’sgrowthpathcontainsseveralnon-standardfeatures.Unlikeinthestandarddividend-taxmodelbySinn（1991）,herethefirmpaysoutdividendsnotonlyinthesteady-statebutalsoduringitsgrowthpath.TheCHCsdividendpolicyisdeterminedbytherulethatthemaximumamountofnormaldividendsisdistributed.Thisoccursbothinthesecondrealinvestmentregimeandthefinancialinvestmentregime.Moreover,theCHCfacesanincentivetocollectnewequityatthesametimeasitpaysoutdividends（distribute-and-call-backpolicy）.Thisincentiveisinducedbythehighertaxonretainedprofits（capitalgains）thandistributionsintheFinnishtaxsystem.

Theoppositeholdswhenconsideringfinancialholdings;Theprobabilityofdistributingmaximumnormaldividendsincreaseswhenthecorporation’sfinancialholdingsincrease.Thisisevidentalsowhenweareconsideringonlydividend-payingcorporations.ThisfindinggivesstrongsupporttoourtheoreticalresultoftheinvestmentbehaviourinCHCs.Wearguedthatfirmshaveanincentivetoincreasenetassetsbyinvestinginfinancialassetsandsimultaneouslypaydividendthemaximumamounttaxableascapitalincome.Thesecon