Dividend tax
The dividend tax is the tax on corporate dividends.George W. Bush proposed in 2003 to eliminate the U.S. dividend tax. As can be seen from the chart below, doing so would have little effect for the bottom 60% of wage-earners, and greatly reduce taxes for the upper 5%, weighted most heavily to the super-rich. More than half the benefits would go to people making more than $200,000 per year, a quarter to people making more than $1 million per year.
One of the ideas for the tax was to discourage stock speculation, the practice of only buying low and selling high without regard to any actual reality of how the company was doing. If there was less of a tax on dividends, which are the shares of the companies profits, there would be more incentive to sit there with investments in companies, and this would lead to a greater economic stablity. This is designed to help the economy as a whole, and thereby benefit everyone.
TAX BENEFITS FOR 2003 BY INCOME:Income Percentile: 0-20 Income Range*: $0-9,964 Average Change in Tax: -$6 Percentage of Total Income Tax Change: 0.4%
Income Percentile: 20-40 Income Range*: $9,965-21,349 Average Change in Tax: -$20 Percentage of Total Income Tax Change: 1.3%
Income Percentile: 40-60 Income Range*: $21,350-37,834 Average Change in Tax: -$47 Percentage of Total Income Tax Change: 3.0%
Income Percentile: 60-80 Income Range*: $37,835-68,329 Average Change in Tax: -$168 Percentage of Total Income Tax Change: 10.7%
Income Percentile: 80-90 Income Range*: $68,330-98,053 Average Change in Tax: -$304 Percentage of Total Income Tax Change: 9.7%
Income Percentile: 90-95 Income Range*: $98,054-133,858 Average Change in Tax: -$622 Percentage of Total Income Tax Change: 9.9%
Income Percentile: 95-99 Income Range*: $133,859-316,894 Average Change in Tax: -$1,777 Percentage of Total Income Tax Change: 22.7%
Income Percentile: 99-100 Income Range*: $316,895 and up Average Change in Tax: -$13,243 Percentage of Total Income Tax Change: 42.3%
*Adjusted gross income on tax return
In the Netherlands there is a tax of 1.2 % per year on the value of the shares, regardless of the dividend.
