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Technology Stocks : All About Sun Microsystems
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To: technologiste who wrote (53794)4/18/2003 2:47:22 PM
From: Steve Dietrich  Read Replies (1) of 64865
 
My understanding is that since the rationale for the dividend tax cut is to end double taxation, if the company who pays you a dividend hasn't paid taxes on that money in the first place, you will.

Only dividends that have been deemed by the IRS taxed at the corporate level will be tax free at the shareholder level.

Talk about complicating the tax code. Why not just make dividends deductible at the corporate level if your goal is to end double taxation on them?

As for growth companies, i'd prefer they spend their revenue on R&D, on acquiring companies and technologies which is a pro-growth strategy. But with this dividend plan there will be a lot of shareholder pressure on tech companies to use the money instead to issue dividends. I think in the long run that will be anti-growth.

Steve
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