New job creation, at what price?

[Rokenn]

Interesting little tidbit I found today:

Even supporters of the dividend tax cut acknowledge it will do little in the short term to create jobs. As John Cassidy noted recently in the New Yorker, if you take the president's statements at face value, each new job created by his tax cut would cost the government $550,000 in lost revenue. That, Cassidy noted dryly, is "about 17 times the salary of the average American worker."

From the Washington Post


Maybe the economy wouild get a bigger boast if they just give out the half mil at random to unemployed folks to use as they wished? [img]graemlins/laugh2.gif[/img]

[Timber Loftis]

What is the dividend tax rate? Anyone know?

[Night Stalker]

About 20% IIRC. Note though, some people use dividends as income! The dividend tax is a double tax on the same dollar for the same thing.

[Timber Loftis]

Originally posted by Night Stalker: About 20% IIRC. Note though, some people use dividends as income! The dividend tax is a double tax on the same dollar for the same thing.

I've explained to MagiK before that it's not a double tax. A dividend is ONLY taxed to you, the stockholder, as income, if the corp. pays you a dividend, it is your income. Now, the corp must pay a tax on its income as well. The system is "transactional" like the sales tax.

If you make $20K this year, you pay income tax on that. Now, if you spend $2K on a laptop, the store gets taxed for that amount as income. That's not "double" taxing. "Double taxation" is a term of art artfully created by businesses to make you think you're being cheated when you aren't.

This "double taxation" is the only price you pay for the entity liability wall between you and the company. Because the company is a different entity (meaning: "legal person"), you are only on the hook for the amount of money you have "bet" on the company (defined by your stock holdings). Otherwise, your home and life savings would be on the line if a corp. you owned stock in went bankrupt. The liability wall is VERY powerful. But, also, because the company is a different entity, you pay a price -- there are two transactions when it makes money and then pays you that money.

If you want to avoid double taxation, form a partnership, S-corp, or LLC (closely held "small business" corp) -- those all get taxed as partnerships (i.e. "pass-through" taxation) because the liability wall is not absolute. These also are the reason why such "double-taxation" concerns DO NOT affect small business owners.

Nixing dividend taxes is a sham. Bushie-boy spouts and sputters about retirees when he's in the pulpit, but it's really about Harken and Halliburton stock for the rich blueblood club.

Oh - and you'll note that 20% is the very low tax rate that Capital Gains also get taxed at. (Actually, I suspect dividend tax rates are higher, and may simply be your income tax rates.)

[ 05-13-2003, 06:30 PM: Message edited by: Timber Loftis ]

[Night Stalker]

Yes the Capitol Gains Tax is 20%. Dividend Tax is that or higher.

When I refer to double tax - I'm not talking about transactional changes of hand (corp to share holder, buyer to seller ....). I'm talking about a dollar coming from a source - stock dividens, being taxed .... then since that same dollar is income, taxed again as income - no transaction change.

I won't dispute that this is more to help Corp cronies though .... but there are people that do benefit besides corps ...

[ 05-13-2003, 06:41 PM: Message edited by: Night Stalker ]

[khazadman]

I don't care who it would benefit. I want to see the government stealing less of our money. The same goes for what they spend as well.