Favor the rich over the general welfare:

We have yet to get the final word on Bush's tax plan, but it looks as if he's proposing that individuals pay no taxes on dividends.

We don't like the idea, but for the sake of argument, let's say that we want to reduce taxes on dividends. The proper thing to do is equalize it with debt: make dividends fully deductible by the corporation.

That means:

• Money goes to work immediately, either in hiring more people, or reducing prices for the consumer.
• The progressivity of the tax system is retained. Wealthy people will continue to pay more taxes on their dividends than others.
• There is no distortion of corporate finances which the current preferential treatment of debt promotes.

Instead, Bush is proposing a less optimal scheme: One that benefits the wealthy, and is less capable of helping the economy.

posted by Quiddity at 1/05/2003 09:09:00 PM