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There's more to it than that. In order to pay dividends, you have to pay corporate tax before you can pay out the dividends. And that is almost 40% on the top e
by jjeaff 7y ago
There's more to it than that. In order to pay dividends, you have to pay corporate tax before you can pay out the dividends. And that is almost 40% on the top end. So the effective tax of qualified dividends is more like 60%.
Alternatively, if you can stash money overseas in tax free accounts or invest the money back into the business to avoid taxes, then you only have the long term capital gains tax.
- ac29 7y ago"After the passage of the Tax Cuts and Jobs Act, on December 20, 2017, the corporate tax rate has been changed to a flat 21% starting January 1, 2018"
- whatshisface 7y agoCorporate taxes are different from personal income taxes.
- jjeaff 7y agoYou are right. So only double the taxes instead of triple by receiving a dividend.