Eliminate dividend tax, AND limited liability....?

[The_Rorschach]

I don't have a great deal to say Kev, this is more Punks domain than mine, as we are leaving economics and headng into the legal territories.

"Republicans are pushing hard to reduce the tax on dividend income, arguing that the government unfairly taxes it twice"

Any why shouldn't we? The corporation's income is taxed at the corporate level, and then when distributed earnings get to the shareholders via dividend, the shareholders include the dividend in their taxable income and are all taxed on that income again. This is double taxation. It is illegal. There are no two ways about it.

"But if the Bush administration truly wants a free market economy, it shouldn't stop there. It should also put an end to limited liability for shareholders."

I like LLC's which basically translates into shareholders not individually being liable for the debts of a corporation, nor lease obligation and loan repayment. I see no reason why the corporation should be given a free ride at the expense of those whom have invested in it. I think the very notion is tremendously short sighted. LLCs generally provide more accounting flexibility than either C or S corporations, which are the only other variable types allowed by most states. In fact, though generally like S-Corporations, LLC corporations possess the fewest necessary formalities required for operation (no annual reports, no limitation to 35 shareholders, no limitation to domestic capital).


"But in a globally connected age of overdevelopment, environmental hazards and corporate malfeasance, does it make sense to have society underwrite the money-making schemes of private individuals?"

Word words blah, If we did away with LLCs, and instituted expressly class C and S corporations, I think we would see more corporate malfeasance, not less. LLC's are very informal for a reason, it makes it easier for shareholders to be more directly involved. If you take the shareholders away from their investment, you will see corporations take accountability away from their practices.