An opinion on dividends' taxation. (Letters).There is no factual evidence that dividends are double-taxed. To claim they are is a complete falsification falsification /fal·si·fi·ca·tion/ (fawl?si-fi-ka´shun) lying. retrospective falsification unconscious distortion of past experiences to conform to present emotional needs. indulged in by many who would know better if they examined the facts. Dividends are taxed only once to stockholders. The income taxes the corporation pays are completely different than those paid by stockholders--they are calculated at different rates and under different rules and regulations. To say that stockholders pay corporate income taxes is at complete odds with the facts. The corporation is well-established as an entirely separate and distinct legal entity. The stockholders do not manage corporate operations or have title to its assets. They are not management and cannot take possession of a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. share of corporate buildings or other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . Stockholders do not declare dividends or run the corporation's daily operations--they simply own a piece of paper that entitles them to a share of net assets on dissolution and to dividends if corporate management declares any. It is true the ups and downs ups and downs pl.n. Alternating periods of good and bad fortune or spirits. ups and downs Noun, pl alternating periods of good and bad luck or high and low spirits in a corporation's profitability will affect all parties interested in its operations whether they are employees, lenders, taxing authorities or stockholders, but it is not true they are all double-taxed simply because the corporation pays taxes on its income. So, let us therefore hear the end of the myth of the double taxation of dividends. It just doesn't hold up under any honest study of the facts. William N. McNairn, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. Palos Verdes Estates, California Palos Verdes Estates is a city in Los Angeles County, California, USA on the Palos Verdes Peninsula. It was designed by the noted American landscape architect and planner Frederick Law Olmsted, Jr. The population was 13,340 at the 2000 census. |
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