Monday, February 27, 2006

Taxing dividends

It was claimed corporate earnings wa taxed on the corporate level, and then again taxed when received as dividend income. Actually only retained earnings were (and still continue to be) taxed as corporate income. Dividends paid by corporation, (distributed income) was and continues to be exempt from corporate income tax.

I do not know which is sader. Members of congress that unkowingly accepted the contention that corporate income was taxed twice, or the members that knew better but did not confront the lie.

If cor[porations wish to shelter retained earnings from corporate income tax, there are methods to do so. For example corporations could Congre

Congress granted deep tax discounts to individual taxpayer"s s dividend income. Preferential tax treatment of a particular source of income increases the burden of taxes and debts paid by other taxpayers and our generations that follow.

This discounted tax rate of dividend income only applies to persons that receive such income, (the stock holders on record). The majority of middle income investment participants are not the stock holders on record of their stocks. The great majority of their investments are in tax deferred retirement funds. They receive little or no benefit from this tax dicount for dividend income.

Rather than drafting a law that would benefit all stock holders, we were able to grant a much greater tax rate deduction for the wealthiest tax payers, a lesser rate deduction for the less wealthy tax payers, and managed to provide the middle income earners with little or no tax rate deduction. This devious inequity is simply ingenious. We’ve managed to reduce our government’s revenue from dividend income but limit tax relief to the wealthier investors.

Please submit your comments and opinions regarding this message.
Respectfully, Supposn


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