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> There's an occasional call to "end the double taxation of dividends". Taxing interest paid and stock buybacks at the same rate would be equally effective. Thi
by quink 12y ago
> There's an occasional call to "end the double taxation of dividends". Taxing interest paid and stock buybacks at the same rate would be equally effective. This would be a good time to do that economically, because interest rates are so low.
I'm in Australia where there's a system of dividend imputation. That means that together with dividends one will receive franking credits representing tax that a company has already paid. This has another advantage of really benefitting shareholders on a low income, few as there may be. The corporate tax rate is 30%. The highest marginal tax rate for the median income earner is 32.5%, meaning dividends, as paid out, will typically attract an effective 2.5% tax. Wonderful.
For someone receiving 70c in dividends and earning under $18k a year, they will get another 30c back through their tax return.
It's a pretty nice system and it's astonishing to me that the vast majority of other countries don't do this. It also means that domestic shareholders are advantaged over foreign ones.
Then there's also the government restriction on mergers/acquisitions among the four big banks, which provides stability, consumer benefits, a nice dividend for the shareholders - it provides an actual desire by the banks to create value.
http://en.wikipedia.org/wiki/Dividend_imputation http://en.wikipedia.org/wiki/Dividend_imputation
http://en.wikipedia.org/wiki/Four_pillars_policy http://en.wikipedia.org/wiki/Four_pillars_policy
- lotyrin 12y agoWhen it comes to taxes on lower incomes and dividends, an earner in the US under $36,900/year has a qualified dividend tax rate of 0%. (From what I understand, at least) http://en.wikipedia.org/wiki/Qualified_dividend#cite_ref-4 http://en.wikipedia.org/wiki/Qualified_dividend#cite_ref-4 http://en.wikipedia.org/wiki/Rate_schedule_(federal_income_tax)#cite_ref-12 http://en.wikipedia.org/wiki/Rate_schedule_(federal_income_t...
- Animats 12y agoFew people with incomes under $36K a year own significant amounts of stock, except maybe some retirees.
- gd1 12y ago>among the four big banks, which provides stability I suppose "stability" is one upside of a government supported quasi-monopoly. Australian banks are an absolute disgrace. I say that as an Australian who returns home from time to time. Charging $2.50 to withdraw money from an ATM?? They get away with gouging customers in ways that simply couldn't happen in the UK or US.
- quink 12y ago1. Pervasive cashless transactions, years ahead of the US or even the UK means that the need for ATMs is minute. I have withdrawn a total of $290 in 2014 (so far, but we're in December now). $1750 in 2012, $510 in 2013 and now $290. Everything else is contactless/chip/electronic transfers. 2. Only if you use an ATM not run by your bank or not in your bank's network. There's near enough always going to be a cluster of four ATMs corresponding to the four big banks in any area, at least one of which will be free to withdraw from. 3. Get an account with ING Direct and they will refund you any ATM fees, even those charged by other companies. Disgrace? Please.
- gd1 12y ago>Pervasive cashless transactions, years ahead of ... even the UK I've shuttled back and forth between the two countries for seven years now, and I can tell you, unequivocally, that you're speaking out of your bumhole.
- quink 12y agoWith a few minutes of Googling, not even per capita or anything: Visa PayWave transactions in Australia, in July 2014: 58 million All contactless transactions in the UK, in September 2014: 32 million And with ING Direct offering 2% cashback (and some banks doing a promotional 5%) on all contactless transactions under $100 things are good. And in the UK contactless is limited to less than A$40, while in Australia it's A$100.