Double Taxation
By ParaTed2k
@ParaTed2k (22940)
Sheboygan, Wisconsin
February 14, 2012 6:29pm CST
Why taxes on dividends is "double taxation". Stock holders are not just investors, they are part owners; partners in the corporation. So when the profit is made, the stock holder has already earned their share of it. It's already their money. When the tax is paid on the profits, it is deducted from what the stock holder will get (just like when your taxes are deducted from your pay).
Then, when the dividend check is sent, the stock holder is taxed again on the same money.
It's no different than if you were taxed on your income when you earn it, and then again when you get your check. I'm sure you would go postal if that were to happen... but for some reason it's "fair" to do it to someone else.
2 people like this
5 responses
@thegreatdebater (7316)
• United States
15 Feb 12
First off you are going on the theory that the corporations pay taxes (many corporations in the United States didn't pay taxes in 2010). If I owned GE stock I would have received a huge dividend, and it would have only been taxed once. Second, even if they are taxed, it is a very small amount, seeing how the VAST majority of corporations have tax experts that lower their overall tax rate as much as possible. The odds of their income being taxed more than 30% is about the same odds as getting struck by lighting. It is 100% fair to tax this income because many of the ultra wealthy in this country receive income from this way. If we didn't tax this then they would pay nothing at all in taxes, and you would see corporations move ALL compensation to dividends. Funny how people who want taxes to be "fair", really want them to only be "fair" for them. If anyone in this country should be upset about taxes it should be the single people who don't have kids, no house, no student loans, and no deductions at all. Those people are the people are actually paying more in taxes than anyone in the country.
But, they can't afford to buy a congressmen!!!!!
@ParaTed2k (22940)
• Sheboygan, Wisconsin
15 Feb 12
as long as you can keep your hatred of others, I guess life is good.
@flowerchilde (12529)
• United States
15 Feb 12
Lobbying needs to be outlawed, totally outlawed.. corporations and politicians/government will own and control everything if not.. if it's just a straight tax, small business will suffer, making unemployment jump. Government and corporations are partners in crime and it's being used as a red herring by government and politicians to throw their partners under the bus.
@flowerchilde (12529)
• United States
15 Feb 12
..and trying so earnestly to pit the people against each other.. it's not party against party half so much as government vs the people.. which one's freedom is supposed to be protected by the constitution? and limiting the scope of the other.. they're using it all too often opposite of its intent/protection..
@flowerchilde (12529)
• United States
15 Feb 12
The 1% pays 40% of our taxes, hope we don't chase them all out of the country.. talk about job loss and unemployment.. Thing is if we confiscated aLL the wealth of the 1% it wouldn't pay even 1/3 of our national debt.. but hey all government seems able to do is hate speech and bicker and try their dangest to get the people doing the same!
@suspenseful (40192)
• Canada
16 Feb 12
You have already been taxed on the money you use to buy stocks. The dividend is the extra money made by the stocks that ou own. So the government regards dividends the same way they regard interest on bank accounts. However they should take the income tax off before mailing out the check and also the income tax should be considerably less then what one pays for regular income and bank interest. The stock owner has to take more risk so that is the reason that dividends should not be taxed.
That is my take on this.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
16 Feb 12
Well, the money you use to buy the shares isn't the same money as you earn in dividends. So that isn't being double taxed.
But when taxing dividends both when they are earned and when they are paid is.
It would be no different than if the government taxed you when you earned your salary, and when your boss sent the check.
@thegreatdebater (7316)
• United States
16 Feb 12
"You have already been taxed on the money you use to buy stocks"
Not in the case of employees of the company, take Mitt Romney, he was compensated in stock options which weren't taxed until he redeems them. That tax rate would be 15%, not 30% as other income is taxed. Now usually these options are for lower prices than the stock price when it is offered, so he is going to make a profit no matter what happens. Thus, the risk that someone on the inside take is MUCH less than a normal investor. If dividends were only held by private investors who do not receive options from the companies I might agree that they shouldn't be taxed. But, when you see what corporations are doing now, you can understand why they are taxed.
@dawnald (85137)
• Shingle Springs, California
15 Feb 12
That's how I feel about having to report the prior year's state income tax refund as income on my federal return.
