The public policy blog of the American Enterprise Institute

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Discussion: (3 comments)

  1. Max Planck

    “The right answer would be to eliminate taxation of dividends at the corporate level and then tax them as ordinary income at the personal level.”

    What a guy!!

    Why don’t you try running for office on that platform?


    The AEI: the bottomless source of mirth!

  2. isn’t the tax levied on the INCREASE?

    if you applied this same logic to salary- you’d be saying that if a guy got a raise, he should not be taxed on the raise….right?

  3. Dividends are paid from company profits (if the company loses money, there aren’t any dividends to distribute). But the profits are taxed before the dividends are paid out to investors.

    If a citizen invests in a house, the citizen gets to deduct interest on his DEBT (mortgage loan). If a citizen invests in Microsoft, the citizen gets taxed on the PROFIT from his investment, even though as a shareholder in Microsoft he has already watched “his” company pay tax on corporate profits.

    This makes no logical sense, but of course it does win enough votes to get politicians re-elected.

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