Intel Corp (INTC)

[willco]

There is another issue here that we haven't touched on yet. When the tax on dividends is high there is a bias toward raising funds using debt rather than equity. If a company borrows in today's world it pays out a rate of interest that is surely in most cases less than the rate it would pay through a dividend. Further, the corporation gets to deduct the interest expense on their tax return but they do not get to deduct the dividend payment.

Another great debate in the tax policy world is over whether the two should be treated differently for tax purposes. In the policy realm economic thought has been informing the notion that they should not.