The Growth and Welfare Effects of Deficit-Financed Dividend Tax Cuts
Journal Article
I develop a tractable growth model that allows me to study analytically transition dynamics and welfare in response to a deficit-financed cut of the tax rate on distributed dividends. I then carry out a quantitative assessment of the Job Growth and Taxpayer Relief Reconciliation Act (JGTRRA) of 2003. I find that the Act produceslowersteady-state growth despite the fact that the economy's saving and employment ratiosrise. Most importantly, it produces a welfarelossof 19.34% of annual consumption per capita-a substantial effect driven by the fact that the steady-state growth rate falls from 2% to 1.08%. © 2011 The Ohio State University.
Full Text
Duke Authors
Cited Authors
- Peretto, PF
Published Date
- August 1, 2011
Published In
Volume / Issue
- 43 / 5
Start / End Page
- 835 - 869
Electronic International Standard Serial Number (EISSN)
- 1538-4616
International Standard Serial Number (ISSN)
- 0022-2879
Digital Object Identifier (DOI)
- 10.1111/j.1538-4616.2011.00399.x
Citation Source
- Scopus