Subject: RE: a stocks and dividends question
From: "Chris Maeda" <chrismaeda@attbi.com>
Date: Thu, 9 Jan 2003 16:13:59 -0800

No.  Dividends are not expenses. Dividends are
paid out using cash left over after covering operating
expenses that you know you will not need in the future.
The amount of cash you need in the future depends on 
what business you are in.  

But you bring up an interesting point.  Another way of
eliminating double taxation is to reduce or eliminate 
corporate income taxes.  This would also encourage
more corporations to move to the US instead of the current
situation where we use the tax code to encourage them
to leave the US and move to Bermuda.  

-----Original Message-----
From: Tom Lord [mailto:lord@emf.net]
Sent: Thursday, January 09, 2003 3:51 PM
To: cmaeda@alum.mit.edu; fsb@crynwr.com
Subject: Re: a stocks and dividends question


So, why does the tax break go to individuals?  Why shouldn't it be
that companies deduct the dividends they pay?  That would seem both to
give greater incentive to pay dividends, and to avoid effective
negative-progressivism in the tax code.  And, it's just common sense:
the dividend is revenue the company is spending, rather than putting
in the financial markets or using to cover operating expenses.  Ok,
maybe treating it as 100% expense isn't _quite_ right (since the
company gets back the average bump in its stock price) -- but sparing
the shareholders taxation on those amounts seems horribly regressive
to me.