Taxes and Dividend Policy
分析1986年税法改革后股利与股票回购的税收优劣，发现即使资本利得按普通收入征税，股票回购仍有税收优势，但税率变化时股利可能更优。
0 The 1986 tax act repealed the tax preference of realized capital gains over ordinary income. This has greatly reduced the tax disadvantage associated with dividend payments. Although several authors have noted that because capital gains can be deferred dividends may still be disadvantageous, the exact tax loss associated with dividend payments has not been analyzed.1 Here it will be demonstrated that if personal tax rates are constant over time, share repurchases have a tax advantage over dividends, regardless of the investor's portfolio choice and even if realized capital gains are taxed at ordinary income rates. The analysis suggests that the magnitude of the tax benefit associated with share repurchases depends on the portfolio choice of the investor, particularly whether the investor whose shares are repurchased wishes to reinvest in the same security or in another one. The analysis also shows that when tax rates are not constant over time, there are certain situations in which dividends may be preferred to capital gains. These particular situations were common in the last two years, due to falling tax rates and the presence of large unrealized capital losses following the October 1987 stock market crash.