"We think companies can do what they want with their cash, but it's
certainly rare to see a public corporation weaken its balance sheet not
for investment in the future but to make a one-time equity payout. It's
a good illustration of the way that Federal Reserve Chairman Ben
Bernanke's near-zero interest rates are combining with federal tax
policy to distort business decisions."
http://online.wsj.com/article/SB1000142412788732470510457814901251417737
2.html?mod=opinion_newsreel
The issue is incentives. The incentive to perform financial gymnastics
with ridiculously high dividend rates is very high. Having a low
dividend tax reduces double taxation of the same profits, and encourages
behaviors that are sound for a healthy corporation.
certainly rare to see a public corporation weaken its balance sheet not
for investment in the future but to make a one-time equity payout. It's
a good illustration of the way that Federal Reserve Chairman Ben
Bernanke's near-zero interest rates are combining with federal tax
policy to distort business decisions."
http://online.wsj.com/article/SB1000142412788732470510457814901251417737
2.html?mod=opinion_newsreel
The issue is incentives. The incentive to perform financial gymnastics
with ridiculously high dividend rates is very high. Having a low
dividend tax reduces double taxation of the same profits, and encourages
behaviors that are sound for a healthy corporation.
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