Replies to post #108085 on Intel Corp (INTC)

[salasidis]

Thank God Canada doesn't think like this. As I stated previously - Earnings in a corporation when distributed in the form of salaries, or Dividends end up aty the personal level being taxed at the same exact rate per dollar earned in the corporation or if that same dollar was earned personally.

Not all corporations are multi national Intels. Some are small or medium sized businesses owned by a small number of people, and dividends should not be penalized relative to salaries.

What you suggest would result in corporations losing their appeal - more private trust type setups would be the result, or simply corporations moving out of high tax environemnts all together. Maybe Intel could "pay" shareholders a salary, so that at least they can get a tax deduction on that expenditure under your scheme :-)

In the end, any move to increase dividend taxation will result in less government revenue

[sheriffbakanay]

Why are you considering Intel's earnings as not belonging to it's shareholders?

Intel is made up of shareholders, so they are taxed when Intel's earnings are taxed.

In Communist Australia, we allow for the corporate tax rate of 30% that companies pay on their earnings, to be claimed back by shareholders when the shareholders lodge their Personal Tax Returns each year.

It strikes me as very odd that an American living in what is meant to be one of the Champion nations of Capitalism, should be making the argument(s) that you are making.

Just to clarify though, the dividends do get added to a shareholders gross earnings, and then they are taxed according to Australia's taxation scales, with the 30% tax on dividends then being subtracted from that person's deemed tax liability.

This means that until your total personal income exceeds the threshold where you pay more than 30%, as an individual taxpayer, you don't pay any tax on your dividends, as it would be regarded as double taxation to do so.

If your dividends where then so great that you are pushed into the highest tax bracket in Australia, then with the 30% you are able to claim back, the most it is possible for an individual shareholder to pay on their dividends is 15%.