CHANGE the Tax Code To FAVOR Dividends

Lataif, Louis E.
January 2003
Financial Executive;Jan/Feb2003, Vol. 19 Issue 1, p52
Academic Journal
The article discusses the benefits that would accrue from making dividends a tax-deductible expense for businesses. The current practice of double-taxation of dividends discourages many firms from paying any dividend at all. Several positive developments would follow from eliminating dividend taxation at the corporate level. More companies would pay dividends, and firm valuations based on dividends would be more reliable. Companies would have more of an incentive to think long-term, rather than focus mainly on the current quarter. Greater investments in research and development would follow.


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