Dividend Tax

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A dividend tax is an income tax paid on the earnings from a corporation that is distributed to its shareholders. Dividend payments are treated as ordinary income, and they are taxed as if the taxpayer had earned income through active work. Presently, there is much controversy surrounding the tax. The government taxes dividends twice: It first taxes corporate income, then taxes the same income again when shareholders receive dividends paid out of corporate income. Which is a “double taxation”( http://pages.stern.nyu.edu/~byeung/dividend%20taxation.pdf). The double taxation raises the questions of whether the tax should be eliminated, and which taxes should be cut. With both sides ..., the dividend tax … because…,
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Currently, as of January 1st 2011, dividends will be taxed at the personal income rate rather than the qualified dividend rate. It should be noted that dividends are distributed after the government has already been allocated its 35 percent corporate tax
Cutting the dividend tax also means more money to the consumer. These cuts will allow more money to be put into the banking system, and have a direct effect on the money multiplier, which would put even more money into the economy. Instead of the economy receiving stimulus packages, a dividend tax cut would give people more disposable income and encourage investment into U.S. companies.
Removal of dividend taxes would allow for investors and retirees to have more spending money. Out of all post-retirees, 50 percent report a dividend tax (Messerli). This is significant because senior citizens, and those still saving for their retirement, would have more discretionary income available. The additional discretionary income could also be used as a way to complement and provide relief for social security.
Elimination of the dividend tax could lead to more accurate accounting and administration of corporation. They would have fewer incentives to misapply generally accepted accounting principles (Wharton). They would have fewer incentives to hide profits because the dividends would not be taxed because profits are shown below the taxation