Dubya's Dividend Delight By Michael Kinsley

Dubya's Dividend Delight By Michael Kinsley
The Bush plan is like a pot of soup made by someone who decides it needs more salt, then adds water to make sure it's not too salty, then worries that it's gotten too watery and stirs in some flour, then decides it needs more salt. Making dividends tax-free is supposed to correct the tax code's tilt in favor of retained earnings, but there's a large capital gains tax break for companies that retain their earnings, in case this new arrangement tilts things too far toward paying out profits as dividends. The plan starts by excluding dividends from a stockholder's taxable income, then adds rules limiting the exclusion when the corporation itself has taken too many deductions and exclusions, then excludes certain kinds of exclusions from this exception to the main exclusion. And so on.