Dividend Taxation

A couple days ago I caught a few minutes of Michelle Caruso-Cabrera (of CNBC) spewing the tiresome right-wing pablum about the supposed double taxation of stock dividends.  As usual, the argument centers around the idea that a stockholder in a corporation is an "owner" and therefore the "owner's" profits are being taxed twice.  This is a good example of the politics of assertion:  if you assert something over and over, you start thinking of it as a fact.

But in point of fact, a shareholder is just that: a shareholder, not an owner.  Saying they are the same thing doesn't make it so.  If you are the owner of a company--like a sole proprietorship--then you have total liability.  A shareholder in a publicly traded company has almost no liability.  Also, let's say I own stock in General Electric.  If I were truly an owner, then I should be able to call the CEO and have him tell me to which political candidates or causes GE is giving money.  I am not able to do that today.  There are a whole host of things that make an "owner" and  "shareholder" different.  (Not to mention the fact that GE routinely pays no corporate tax anyway, so the double taxation argument goes out the window.)

As to the whole idea of double taxation, it's really a superficial and flimsy concept.  If I have a job and pay taxes on my earnings and then hire a plumber and pay him out of those after-tax earnings, Ms. Caruso-Cabrera's argument is that the plumber should pay no taxes because that money has already been taxed.  In effect, almost all the dollars flowing through the economy have already been taxed many times over.

So puhlease...stop whining about taxes on dividends.  It's getting very boring.