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dc.contributor.advisorJames Poterba and Jerry Hausman.en_US
dc.contributor.authorEdgerton, Jesse (Jesse James)en_US
dc.contributor.otherMassachusetts Institute of Technology. Dept. of Economics.en_US
dc.date.accessioned2009-11-06T14:49:14Z
dc.date.available2009-11-06T14:49:14Z
dc.date.copyright2009en_US
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/1721.1/49537
dc.descriptionThesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009.en_US
dc.descriptionThis electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.en_US
dc.descriptionIncludes bibliographical references (p. 141-147).en_US
dc.description.abstractThis thesis consists of three essays that examine the impact of tax policy on firms' decisions to invest in productive capital. The first chapter uses newly-collected data on transaction prices of used construction machinery to examine the impact and incidence of recent tax incentives for investment. Theory predicts that incentives applying only to new investment should drive a wedge equal to the value of the incentives between the prices of new machines and equally productive used machines. The estimated effect of recent "bonus depreciation" incentives on the size of this wedge is close to zero. The total supply of machines, however, is highly price elastic. Together, these results suggest that the effectiveness of tax incentives that succeeded in stimulating investment demand would not be blunted by inelastic supply, but that the most recent set of tax incentives did little to stimulate investment demand. The second chapter documents the prevalence of losses among US corporations in recent years and examines their implications for the effectiveness of tax incentives for investment. Results suggest that asymmetries in the corporate tax code made recent bonus depreciation tax incentives about 5% less effective than they otherwise would have been. Recent declines in the ratio of cash flows to assets made bonus depreciation as much as 24% less effective than it otherwise would have been. Thus, recent losses can explain only part of the observed ineffectiveness of bonus depreciation.en_US
dc.description.abstract(cont.) The final chapter estimates the response of dividend payouts to a 2003 dividend tax cut using a new control group of unaffected firms. Dividend payouts by real estate investment trusts rose sharply following the tax cut, even though REIT dividends did not benefit from the cut. It appears that the surge in aggregate dividend payouts subsequent to the tax cut was driven primarily by an increase in corporate earnings. Evidence from the tax cut thus provides little support for the claim that dividend taxation creates large distortions to firm investment decisions or large efficiency costs.en_US
dc.description.statementofresponsibilityby Jesse Edgerton.en_US
dc.format.extent147 p.en_US
dc.language.isoengen_US
dc.publisherMassachusetts Institute of Technologyen_US
dc.rightsM.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.en_US
dc.rights.urihttp://dspace.mit.edu/handle/1721.1/7582en_US
dc.subjectEconomics.en_US
dc.titleEssays on taxation and investmenten_US
dc.typeThesisen_US
dc.description.degreePh.D.en_US
dc.contributor.departmentMassachusetts Institute of Technology. Dept. of Economics.en_US
dc.identifier.oclc436451503en_US


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