Subject: Re: back to topic (was Re: a stocks and dividends question)
From: "Stephen J. Turnbull" <>
Date: Sat, 11 Jan 2003 14:43:08 +0900

>>>>> "Benjamin" == Benjamin J Tilly <" <>> writes:

    Benjamin> If dividends are no longer taxed, while capital gains
    Benjamin> are, then there will be pressure on companies to issue
    Benjamin> dividends to avoid capital gains.

Sigh.  The term "double taxation" really is appropriate; some people
obviously don't get the appropriate estimate of "tax incidence"
without that mnemonic.

It is not that dividends will no longer be taxed.  It is that _one_ of
the taxes incurred by dividends will be eliminated.  Thus the tax rate
will drop dramatically, from the current situation of significantly
higher than for capital gains.

Whether (significantly higher + drop dramatically) is higher or lower
than the current rate on capital gains is not obvious.

Institute of Policy and Planning Sciences
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