Replies to post #108283 on Intel Corp (INTC)

[Professor MD]

We know Intel pays approx 27.2% income tax on its EBT, regardless of whether Intel pays a dividend or not.

I want to know when Elmer pays "his" 27.2%.

All I see is an expense that reduces Intel, Incorporated's net income, not Elmer's.

The income tax that Intel pays on its “EBT” does not include the tax on dividend because dividend is not earning. An additionall tax is levied on Intel, based on the dividend it pays its shareholders. The dividend is taken out of Intel's earning but the income tax is not reduced.

Most IRA contain dividend bearing shares. The value of these share will fall if the tax on dividend (but not the tax on earning) will triple.

[wbmw]

Tell it to Elmer. He thinks that he's paying more than 15% on the money he makes from dividends, because Intel paid income taxes and he owns a share of Intel.

He JUST SAID IT:

"MY tax burden. 27.2% + 15% = 42.2%"

You're nit-picking. His issue isn't 42%, it's that he's paying any taxes at all on money that has already been taxed. He believes that as a shareholder of the company, he owns his share of all the income already - and so he defines the dividend is a cash payment from the pool of money that he already owns. Therefore, he's arguing that it's double-taxation, and his basis is arguably without flaw.

If you're arguing against the double-taxation argument, then whether the real tax is 42.2%, or 15% with some amount of lost potential, or 27.2% with some portion of dollars taxed again at a lower 15% rate - all of these are versions of the same argument, and just nit-picking over the math.