tag:blogger.com,1999:blog-24338064.post1581211776496752619..comments2024-02-11T19:28:27.997+11:00Comments on Personal Reflections: A note on dividend imputationJim Belshawhttp://www.blogger.com/profile/10075614280789984767noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-24338064.post-25463845038346999082014-09-02T22:31:29.110+10:002014-09-02T22:31:29.110+10:00I don't know, Evan. It also bears upon Winton&...I don't know, Evan. It also bears upon Winton's point. <br /><br />I support imputation because, to my mind, it removes a distortion affecting one form of funding compared to another. However, I simply haven't thought through all the economics.<br /><br />As an example, since dividend imputation only applies to Australian profits, it effectively increases the value of companies with Australian earnings vs overseas earnings. Then to the degree it increases share prices, it makes it easier for firms to use equity rather than debt to raise capital.<br /><br />As more and more Australian firms invest overseas, the proportion of profits available for dividend imputation declines. <br /><br />I need to sit down quietly at some point and think some of this through. Jim Belshawhttps://www.blogger.com/profile/10075614280789984767noreply@blogger.comtag:blogger.com,1999:blog-24338064.post-19848412624997209392014-09-02T20:20:35.419+10:002014-09-02T20:20:35.419+10:00Dividend imputation is a good thing in terms of re...Dividend imputation is a good thing in terms of removing double tax on dividends and removing a disincentive that would otherwise discourage distribution of profits to shareholders in the form of dividends. If it is removed I guess firms and investors will just alter their behaviour to take returns in the form of capital gains rather than dividends. <br />However, dividends serve a purpose. They help individual investors to budget - to live off their income, without fear of consuming their capital. They may also help investors to assess corporate performance, but I suspect that benefit is illusory given the tendency for some companies to go into debt to maintain dividends.<br />Winton Bateshttps://www.blogger.com/profile/07383561940886657594noreply@blogger.comtag:blogger.com,1999:blog-24338064.post-18486172646905456392014-09-02T13:24:18.317+10:002014-09-02T13:24:18.317+10:00That's interesting, I hadn't heard about i...That's interesting, I hadn't heard about it.<br /><br />Do you know if there are different patterns of investment in Malta, NZ and Aus?Evanhttps://www.blogger.com/profile/13355215688351759230noreply@blogger.com