Key Words: 1973-3 11 5 % 5 1 % 18% 5 % 11 11 JEL Classification: H24H31G11 PD 567-47 6-1E-mail.sekita@iser.osaka-u.ac.jpTel.6-6879-855Fax.6-6879-8584.
Measurements of Effective Tax Rates on Interest Income, Dividends and Capital Gains Income from Stock By Shizuka Sekita Abstract This paper measures the effective tax rates of three types of capital income (interest income, dividends and capital gains income from stock) and two types of financial assets (deposit and stock) and discuss which type of capital income and financial asset is tax-favored. I found that the effective tax rate on dividends is always higher than that on interest income during 1973-3. I also found that if rate of capital gains is low and holding period of stock is short, the effective tax rate on capital gains from stock is higher than that on dividends, but if rate of capital gains is higher than 5 percent and holding period is longer than 5 years, the effective tax rate on capital gains from stock is the lowest among three types of capital income, regardless of inflation rate and year. In addition, if rate of capital gain is 1 percent (18 percent), the effective tax rate on stock is higher (lower) than that on deposit, and if rate of capital gain is 5 percent, the effective tax rates on stock and deposit are relatively similar. Conducting the simulation, I found that under 11 tax rule, if rate of capital gains is high and holding period of stock is long, the effective tax rates on capital gains from stock is dramatically low, comparing to the effective tax rates on interest income and dividends. Moreover, the effective tax rate on stock is lower than that on deposit in most cases. JEL Classification: H24; H31; G11 Key Words: Household; Capital Income; Effective Tax Rates 2
6-7 54.3% 25% 16.9% 8.4% 3.1 5.4 2.3% 1. 1 2 4 6 3 1 http://www.shiruporuto.jp/finance/chosa/yoron8fut/pdf/yoronf8.pdf 2 1988 67 198919975 3 http://www.cao.go.jp/zeicho/tosin/pdf/16615a.pdf 3
King-Fullerton ( King and Fullerton(1984) 1973-3 11 1973-3 11 1973 4 2.1 1973 1 1988 3 21 1988 1988 4 1941 1963 3 1963 4 4 1995 1 4
5
4 5 35 35 35 55 4 1988 3 31 1988 1988 4 64 6 65 1988 4 1988 (tax erosion) 1997 1994 1994 1 1973 14 7 5 8 2.2 1973 3 12 5 1994 6 7 14 http://www.cao.go.jp/zeicho/tosin/131214a2.html 8 14 http://www.mof.go.jp/genan14/zei3.pdf 6
1948 21 3 3 3 3 4 3 1 3 4 3 12 1 4 1 8 3 7 3 8 4 15 5 9 7 8 12 8 9 1 1 12 3 4 1 5 1 1 3 12 5 54 1 8 3 1 7 3 8 12 9 1 15 5 9 5 7
2.3 1953 1989 3 1987 12 5 1988 1 3 12 1 Iwamoto1991 198-89 2.7-12.3 1953 1989 4 26 % 6% 1% 1996 4 1.5 1989 1999 4 1999 1 4 1 2 3 3 1 3 3 1 5 1 7% 3% 8 1 15% 5% 7 8 12 8 5 1 12 1 8
11 3.1 r s i t r i (1) s ( 1 t ) i (2) King-Fullerton z z ( r s) / r (3) (1)(2)(3)(4) z t ( r ) / r (4) (4)(5) ( 1 z ) r (1 t )( r ) (5) t 1995 12 1973-3 31 32 13 t ( Pt, avg / Pt 1, avg ) 1 (6) 12 17 12 68SNA 17 93SNA 14 t P t, avg 11 12 1995 King-Fullerton 1995 1995 13 1995 32 14 1973-3 68SNA 93SNA 68SNA 93SNA SNA 93SNA 68SNA 93SNA 93SNA 68SNA 9
(1995) 1
(1995) 3 1-3 %4-12 1% 1 5 1 1 % 1 5 1 1 %*(1/4)+((1%+%)/2)*(3/4)=16%*(1/4)+((%+ )/2)*(3/4)=11%*(1/4)+((%+11%)/2)*(3/4)=7% 11
r r t r t r r r r -1% 1% 2% r (4) r r r 1% 2% r -2%-1% 1% 15 1% 9 2% % 2% 4%% 2%4% 3.2 15 r.5%(4)r Bradford and Fullerton(1981) r (4)tax wedger-sr 1% 12
1973 1989 3 Iwamoto1991 1973 1989 3 Iwamoto1991 16 1989 4 2 1999 3 3 Iwamoto1991 b b (1 z ) r (1 t t )(1 r ) 1 1 2 (7) z r b t 1 t 2 t 2 1989 3 Iwamoto1991 17 b ] b b 1 (1 z) r (1 t1)(1 r ) t3[(1 r ) 1 (8) t 3 t 3 1989 3 (7) (8)1 2 16 17 Iwamoto1991 13
(7)(8)t 1 t 2 t 3 33 18 (6)r (7)(8)t 1 t 2 t 3 r b (7)(8) 3.1 14
34 r -12% 5% 18% r r r r 1%5%18% b 151 4.1 4.2 11 15
4.1 1973-3 41 =% =2% =4% =4% 1988 3 1988 4 65 1995 1994 1 1989 4 1999 4 3 26% 1% =% =2% =4% r b 19 r b r =5%b =5 3 r b r =1% r 5% 3 19 (4) r 16
18 =% 3 =%() r=1% r=2% 16 14 25 r=1% r=2% 1 r=1%, b=1 r=1%, b=5 1 15 r=1%, b=1 8 r=5%, b=1 6 1 r=5%, b=5 4 5 r=5%, b=1 r=18%, b=1 r=18%, b=5 r=18%, b=1 18 16 =2% 5 45 =2%() r=1% r=2% r=1% 14 4 r=2% 1 35 r=1%, b=1 1 3 25 r=1%, b=5 r=1%, b=1 8 r=5%, b=1 6 4 15 1 r=5%, b=5 r=5%, b=1 r=18%, b=1 5 r=18%, b=5 r=18%, b=1 18 =4% 5 =4%() r=1% 16 14 1 1 8 6 4 45 4 35 3 25 15 1 5 r=2% r=1% r=2% r=1%, b=1 r=1%, b=5 r=1%, b=1 r=5%, b=1 r=5%, b=5 r=5%, b=1 r=18%, b=1 r=18%, b=5 r=18%, b=1 17
16 =% 3 =%() r=1% r=2% r=1%, r=1%, b=1 14 25 r=1%, r=1%, b=5 r=1%, r=1%, b=1 1 1 r=1%, r=5%, b=1 r=1%, r=5%, b=5 r=1%, r=5%, b=1 r=1%, r=18%, b=1 8 15 r=1%, r=18%, b=5 r=1%, r=18%, b=1 r=2%, r=1%, b=1 6 1 r=2%, r=1%, b=5 r=2%, r=1%, b=1 4 5 r=2%, r=5%, b=1 r=2%, r=5%, b=5 r=2%, r=5%, b=1 r=2%, r=18%, b=1 r=2%, r=18%, b=5 r=2%, r=18%, b=1 16 =2% 6 =2%() r=1% r=2% r=1%, r=1%, b=1 14 5 r=1%, r=1%, b=5 r=1%, r=1%, b=1 1 1 4 r=1%, r=5%, b=1 r=1%, r=5%, b=5 r=1%, r=5%, b=1 r=1%, r=18%, b=1 8 3 r=1%, r=18%, b=5 r=1%, r=18%, b=1 r=2%, r=1%, b=1 6 r=2%, r=1%, b=5 r=2%, r=1%, b=1 4 r=2%, r=5%, b=1 1 r=2%, r=5%, b=5 r=2%, r=5%, b=1 r=2%, r=18%, b=1 r=2%, r=18%, b=5 r=2%, r=18%, b=1 16 =4% 6 =4%() r=1% r=2% r=1%, r=1%, b=1 14 5 r=1%, r=1%, b=5 r=1%, r=1%, b=1 1 r=1%, r=5%, b=1 1 8 6 4 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 1 3 4 3 1 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 1 3 r=1%, r=5%, b=5 r=1%, r=5%, b=1 r=1%, r=18%, b=1 r=1%, r=18%, b=5 r=1%, r=18%, b=1 r=2%, r=1%, b=1 r=2%, r=1%, b=5 r=2%, r=1%, b=1 r=2%, r=5%, b=1 r=2%, r=5%, b=5 r=2%, r=5%, b=1 r=2%, r=18%, b=1 r=2%, r=18%, b=5 r=2%, r=18%, b=1 18
42 r 1% r 18% r 5% r 3 1 1 8 6 4 2 4 4.211 3 4 1 12 3 1 1 12 11 11 43 3 r 19
=% 9%=-11 =2% 28%=4-12 =4% 47% =6-13 4 4 =% 8%=-12 =2% 25%=4-15 =4% 43%=6-17 1 1 8 6 4 2 4 r b 1973-3 11
5% 5 3 1% 18% 5% 3 3 11 Bradford, David F. and Fullerton, Don (1981) Pitfalls in the Construction and Use of Effective Tax Rates, NBER Working Paper Series, no. 688 (June). 21
Iwamoto, Yasushi (1991) The Japanese Tax Reform and The Cost of Capital, Ricerche Economiche, vol. 45, no. 2-3, pp. 37-328 (April/September). King, Mervin A. and Fullerton, Don eds. (1984) The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and West Germany, (Chicago: The University of Chicago Press). (1995) vol. 35 (5 ). (1989) pp. 273-39. (1997) vol. 46 no. 3pp. 24-45 (1 ). (6) 1988 56 pp. 131-146 (12 ). (5) Discussion Papers in Economics and Businessno. 5-17 (6 ). (7) 24 pp. 26-48 (3 ). 22