Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Posted by taxguru on January 23, 2003

More Complication?

As should be very apparent, I have always supported the concept of eliminating double taxation of corporate income by making dividends paid either deductible by the corporation or tax free to the recipients. Bush’s tax cut proposal to make dividends tax free sounded easy enough at first. That’s why I was disappointed to see this story about possible changes to the plan. Rather than take the simple straight forward approach of just making all dividends across the board tax free to shareholders, they seem intent on adding even more complexity to the tax system for both the corporations and the stockholders by making some kinds of dividends tax free and some still taxable. What a mess this will be for everyone.

Of course, as I have observed for decades, this is just business as usual for our rulers in DC. Never make a one sentence law when a 50 page version will allow more tinkering with people’s lives. You would think that our rulers in DC are doing nothing but thinking up new ways to keep accountants busy with their never ending complicated tax law changes.


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