How to reasonably end the (so-called, not-really) "double taxation" of dividends:
The corporation that distributes the dividends pays, oh, 23% tax on the total disbursement. This is not subject to any deduction, tax credit, tax shelter or any other tax-avoidance accounting: If a corporation cuts $1M in dividend checks, it cuts a $230K check to the government. The dividend recipients pay no tax at all.
I'm not a corporate accountant, so I don't know how we'd end up having to structure the tax payment on the corporate balance sheet, but it would probably (to avoid "double taxation") have to count as an expense that the corp didn't have to pay corporate income tax on.
Simple, straightforward, and fair: the money is taxed once at a consistent rate. This is a better plan than President Bush's, which requires extraordinary levels of accounting to determine how much the dividends you receive have already been taxed, and it's not worse than the current scheme, which subjects dividends to personal income taxes, and possibly also, under some circumstances, if the corporate accountant is a) honest or b) incompetent, to corporate income taxes.
Posted by Greg at February 11, 2003 9:53 AM
Any system of taxation which is both fair and acceptable to the majority of the citizens of the United States is ipso facto dead in the water under the current administration. If it makes sense, it is not politically viable.
Well, yeah. That's why I'm running for President. Because sensible policies need strong advocacy.
(Also to justify sarcastic titles for blog entries, and to score dates with fabulous actresses in the White House.)
Still wondering what the deal is with this oh so bad double taxation when all we working stiffs are double taxed every day: tax on wages and tax on purchases = double taxation...
It's a spin point, nothing else; the Republicans think they can sell their tax cuts for the rich more effectively if they give it a clever name. They really do approach politics as a marketing exercise, as if choosing whether to spend money on Aid to Families with Dependent Children and tax cuts for the rich was on an even footing with choosing whether to use Colgate or Crest on your toothbrush.