Corporate Payouts and the Tax Price of Corporate Retentions: Evidence from the Undistributed Profits Tax of 1936-1938

Many provisions of the U.S. tax code affect corporate decisions to pay out or retain earnings. Most studies of these effects have examined the effects of dividend and capital gains taxes on payouts. Relatively few studies have considered the effects of corporate taxes on retentions. In the early 1900s, the United States experimented with several corporate taxes on retentions. These taxes increased the price of corporate retentions, thereby encouraging corporate payouts. This paper studies the response of corporations to the most significant of these experiments the Undistributed Profits Tax of 1936-1938. While the U.S. no longer directly taxes corporate retentions, our study provides empirical results relevant to two recent policy debates. First, to the extent that corporate payouts did respond significantly to a change in the corporate price of retentions, we can learn more about the implicit prices corporations place on internal funds. These estimates enable us better understand the effects of government policies designed to encourage corporate reinvestment. Second, our study provides evidence relevant to several recent proposals designed to resolve managerial agency problems. These proposals require managers to payout their "free" cash flows as a way of committing not to waste financial capital. The Undistributed Profits Tax of 1936-1938 had a similar goal. Its maximum marginal tax rate of 27 percent on corporate retentions gave managers strong incentives to pay out retained earnings. We study the effects of the Undistributed Profits Tax on corporate payouts using a panel data set on 26 large petroleum companies. These data have a number of advantages, not the least of which is the relative homogeneity of petroleum firms' investment opportunities. We find that on average corporate payout policies did respond significantly to the surtax in 1936, the first year of the tax. There was much less of a response in 1937, and practically none in the last year, 1938. The smaller payouts in 1937 and 1938 suggest that managers were able to find margins other than dividends through which they could reduce their tax burden. These other margins included the short-term manipulation of expenses and delays in recognizing revenues. These responses suggest that managers place a relatively high valuation on internal versus external funds. They also suggest that proposals that would require managers to payout free cash flows must resolve an important incentive problem -- how to get managers to reveal fully what cash flows are "free." Finally, our results document the importance of recognizing behavioral responses to taxes. That is, firms may respond to changes in relative tax prices by finding other margins by which they can reduce their tax burdens.

Double Time Window Targeting Technique: Real time DMRG dynamics in the PPP model

We present a generalized adaptive time-dependent density matrix renormalization group (DMRG) scheme, called the {\it double time window targeting} (DTWT) technique, which gives accurate results with nominal computational resources, within reasonable computational time. This procedure originates from the amalgamation of the features of pace keeping DMRG algorithm, first proposed by Luo {\it et. al}, [Phys.Rev. Lett. {\bf 91}, 049701 (2003)], and the time-step targeting (TST) algorithm by Feiguin and White [Phys. Rev. B {\bf 72}, 020404 (2005)]. Using the DTWT technique, we study the phenomena of spin-charge separation in conjugated polymers (materials for molecular electronics and spintronics), which have long-range electron-electron interactions and belong to the class of strongly correlated low-dimensional many-body systems. The issue of real time dynamics within the Pariser-Parr-Pople (PPP) model which includes long-range electron correlations has not been addressed in the literature so far. The present study on PPP chains has revealed that, (i) long-range electron correlations enable both the charge and spin degree of freedom of the electron, to propagate faster in the PPP model compared to Hubbard model, (ii) for standard parameters of the PPP model as applied to conjugated polymers, the charge velocity is almost twice that of the spin velocity and, (iii) the simplistic interpretation of long-range correlations by merely renormalizing the {\it U} value of the Hubbard model fails to explain the dynamics of doped holes/electrons in the PPP model.Comment: Final (published) version; 39 pages, 13 figures, 1 table; 2 new references adde

The incidence, prevalence and mortality of granulomatosis with polyangiitis in the UK Clinical Practice Research Datalink

Objectives: To estimate the incidence, prevalence and mortality of Granulomatosis with polyangiitis (GPA) in the United Kingdom. Methods: We conducted a historical cohort study using data from the Clinical Practice Research Datalink and Hospital Episode Statistics (CPRD-HES). We calculated incidence rate ratios, adjusted for age, gender and ethnicity, using Poisson regression. Results: We identified 462 cases diagnosed between 1997 and 2013. Our overall estimate of incidence was 11.8 (95% CI 10.7-12.9)/million person-years. Incidence in children (aged <16 years) was 0.88 (95% CI 0.40-1.96), and adults 14.0 (95% CI 12.8-15.4). The incidence was lower in females (adjusted IRR 0.68; 95% CI 0.56-0.81) and highest in the 55-69 year age-group (adjusted IRR 9.5, 95% CI 6.9-13.0; reference group 0-39 years). Incidence was not significantly different in the Black / Minority Ethnic population compared to the white population (adjusted odds ratio 0.78, 95% CI 0.53-1.13, p=0.13). The prevalence in 2013 was 134.9 (121.3-149.6) /million. Mortality was 13.6% at 1-year, and higher in HES than CPRD-identified cases (Hazard ratio 3.16, 95% CI 2.19-4.56, p<0.001). Conclusions: By combining primary and secondary care datasets we have found the incidence and mortality of granulomatosis with polyangiitis to be higher than previously reported. We predict that at present each year in the UK there will be approximately 700 new cases of whom 95 will die within 12 months

Dyson Equation Approach to Many-Body Greens Functions and Self-Consistent RPA, First Application to the Hubbard Model

An approach for particle-hole correlation functions, based on the so-called SCRPA, is developed. This leads to a fully self-consistent RPA-like theory which satisfies the $f$-sum rule and several other theorems. As a first step, a simpler self-consistent approach, the renormalized RPA, is solved numerically in the one-dimensional Hubbard model. The charge and the longitudinal spin susceptibility, the momentum distribution and several ground state properties are calculated and compared with the exact results. Especially at half filling, our approach provides quite promising results and matches the exact behaviour apart from a general prefactor. The strong coupling limit of our approach can be described analytically.Comment: 35 pages, 18 Figures, Feynman diagrams as 10 additional eps-files, revised and enhanced version, accepted in Phys. Rev.

Incidence of ANCA-associated vasculitis in a UK mixed ethnicity population

Objectives: We aimed to estimate the incidence of ANCA-associated vasculitis in the UK and how this varied by ethnic group. Methods: We identified incident cases of ANCA-associated vasculitis between March 2007 and June 2013 in the Nottingham–Derby urban area from medical records using multiple sources. We derived the denominator population from the 2011 census, and we calculated incidence rate ratios using Poisson regression. Results: Overall, we identified 107 cases of ANCA-associated vasculitis, giving an incidence of 23.1 per million person-years (95% CI: 18.9, 27.9). The incidence among the white population was 25.8 per million person-years (95% CI: 21.0, 31.3) and among the black and minority ethnic (BME) population 8.4 per million person-years (95% CI: 3.1, 18.3). After adjustment for age and sex, the difference between ethnic groups was not statistically significant (incidence rate ratio 0.7, 95% CI: 0.3, 1.5, P = 0.3). Conclusion: Overall, the incidence of ANCA-associated vasculitis was similar to other epidemiological studies. Crude incidence rates were lower in the BME than in the white population, but this was partly explained by the older age profile among the white compared with BME population

Quantum critical point in a periodic Anderson model

We investigate the symmetric Periodic Anderson Model (PAM) on a three-dimensional cubic lattice with nearest-neighbor hopping and hybridization matrix elements. Using Gutzwiller's variational method and the Hubbard-III approximation (which corresponds to the exact solution of an appropriate Falicov-Kimball model in infinite dimensions) we demonstrate the existence of a quantum critical point at zero temperature. Below a critical value $V_c$ of the hybridization (or above a critical interaction $U_c$) the system is an {\em insulator} in Gutzwiller's and a {\em semi-metal} in Hubbard's approach, whereas above $V_c$ (below $U_c$) it behaves like a metal in both approximations. These predictions are compared with the density of states of the $d$- and $f$-bands calculated from Quantum Monte Carlo and NRG calculations. Our conclusion is that the half-filled symmetric PAM contains a {\em metal-semimetal transition}, not a metal-insulator transition as has been suggested previously.Comment: ReVteX, 10 pages, 2 EPS figures. Minor corrections made in the text and in the figure captions from the first version. More references added. Accepted for publication in Physical Review

A Pilot Randomized, Controlled Trial of an In-Home Drinking Water Intervention Among HIV + Persons

Although immunocompromised persons may be at increased risk for gastrointestinal illnesses, no trials investigating drinking water treatment and gastrointestinal illness in such patients have been published. Earlier results from San Francisco suggested an association (OR 6.76) between tap water and cryptosporidiosis among HIV + persons. The authors conducted a randomized, triple-blinded intervention trial of home water treatment in San Francisco, California, from April 2000 to May 2001. Fifty HIV-positive patients were randomized to externally identical active (N = 24) or sham (N = 26) treatment devices. The active device contained a filter and UV light; the sham provided no treatment. Forty-five (90%) of the participants completed the study and were successfully blinded. Illness was measured using \u27highly credible gastrointestinal illness\u27 (HCGI), a previously published measure. There were 31 episodes of HCGI during 1,797 person-days in the sham group and 16 episodes during 1,478 person-days in the active group. The adjusted relative risk was 3.34 (95% CI: 0.99-11.21) times greater in those with the sham device. The magnitude of the point estimate of the risk, its consistency with recently published observational data, and its relevance for drinking water choices by immunocompromised individuals support the need for larger trials

Can granulomatosis with polyangiitis be diagnosed earlier in primary care? A case-control study

Background: People with granulomatosis with polyangiitis (GPA) commonly describe long delays before diagnosis. Aim: To study the natural history of GPA prior to diagnosis using primary care data, and determine whether clinical features could be identified to help earlier diagnosis.DesignCase-control study using the Clinical Practice Research Datalink. Methods: We compared primary care activity and clinical features between cases and 10 matched controls. Results: We identified 757 cases and matched 7,546 controls. Compared to controls, cases had more GP consultations and overall healthcare activity in the five years prior to their diagnosis, with a marked increase in the year before diagnosis, and particularly in the last 3 months. However, consultations were mostly for symptoms that were not specifically related to GPA. In the year prior to diagnosis, the most frequent and strongly predictive clinical features of GPA were Ear Nose and Throat (ENT) symptoms (34.5% of cases, odds ratio (OR) 10.5, 95% confidence intervals (CI) 8.6-12.7), and general (constitutional) symptoms (21.5% of cases, OR 9.0, 95% CI 7.1-11.3). In the year before diagnosis a larger number of cases attended secondary care (382, 50.5%) than had records of clinical features of GPA. Conclusions: After discussing our findings, we conclude it would be difficult to identify cases of GPA earlier in primary care. Our results support a need for heightened awareness of this condition among secondary care clinicians, especially those assessing emergency admissions, and in the clinics which were most frequently attended by cases 3-12 months prior to diagnosis

Changes in the gene expression profiles of the brains of male European eels (Anguilla anguilla) during sexual maturation

Background: The vertebrate brain plays a critical role in the regulation of sexual maturation and reproduction by integrating environmental information with developmental and endocrine status. The European eel Anguilla anguilla is an important species in which to better understand the neuroendocrine factors that control reproduction because it is an endangered species, has a complex life cycle that includes two extreme long distance migrations with both freshwater and seawater stages and because it occupies a key position within the teleost phylogeny. At present, mature eels have never been caught in the wild and little is known about most aspects of reproduction in A. anguilla. The goal of this study was to identify genes that may be involved in sexual maturation in experimentally matured eels. For this, we used microarrays to compare the gene expression profiles of sexually mature to immature males. Results: Using a false discovery rate of 0.05, a total of 1,497 differentially expressed genes were identified. Of this set, 991 were expressed at higher levels in brains (forebrain and midbrain) of mature males while 506 were expressed at lower levels relative to brains of immature males. The set of up-regulated genes includes genes involved in neuroendocrine processes, cell-cell signaling, neurogenesis and development. Interestingly, while genes involved in immune system function were down-regulated in the brains of mature males, changes in the expression levels of several receptors and channels were observed suggesting that some rewiring is occurring in the brain at sexual maturity. Conclusions: This study shows that the brains of eels undergo major changes at the molecular level at sexual maturity that may include re-organization at the cellular level. Here, we have defined a set of genes that help to understand the molecular mechanisms controlling reproduction in eels. Some of these genes have previously described functions while many others have roles that have yet to be characterized in a reproductive context. Since most of the genes examined here have orthologs in other vertebrates, the results of this study will contribute to the body of knowledge concerning reproduction in vertebrates as well as to an improved understanding of eel biology.Peer Reviewe