So, Exxon-Mobil's rolled up over 40 billion in profits over the last year.  The question in Washington seems to be, "How do we get our hands on some of that?".  In fact, Hillary is talking about resurrecting the windfall tax on oil profits.  In typical big government fashion. the politicians are approaching this the wrong way.  If they want to get some of that back in to the hands of the people (of course, I'm making the assumption that that is what they actually want to do), increasing taxes is not going to be effective.  I, however, do have an easy solution.

Repeal the dividend tax.




There, wasn't that easy?  With the dividend tax gone, companies will be more likely to actually pay out dividends.  Right now, that money is held by the company in order to keep their balance sheets looking good and the stock price climbing.  An investor, in the current climate, is typically not buying a stock for the dividends paid, but on the chance that that stock will continue to rise.  However, without the double taxation of a dividend tax, there is a greater incentive to buy for the sake of the dividend, and therefore for the company to pay out a higher dividend.  Then the stock owner is free to spend that money in ways that are taxed, such as sales taxes, and property taxes on his nice, new yacht.

Posted by: jcallery at 10:32 PM | No Comments | Add Comment
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