Since the turn of the millennium there has been a dramatic increase in dividend payouts from closely held corporations (CHC:s) in Sweden. During the same time period, the tax treatment of dividends from CHC:s has become significantly more generous. In this research project we will use de-identified micro data, linking firms to their active owners. We first describe how corporate owners act to minimize taxes on distributed profits given the so-called “3:12-rules”, which are in place to prevent income shifting from wages to dividends. We will then analyze the effects of dividend tax rules on real outcomes such as investments, wages and employment. Moreover, we wish to test the hypothesis that expectations of higher taxes, inducing a temporary acceleration in dividend payouts, also impacts on investments and real firm behavior. We plan to combine quasi-experimental and descriptive empirical methods with insights from modern public finance. From an international perspective our data are excellent: the data cover the entire universe of individuals and firms, and they contain detailed and relevant information, e.g. identifiers for corporate groups. Finally, since CHC owners tend to locate at the top of the income distribution, we also believe that our project will deepen our understanding of income inequality.