Bruce Bartlett in the Washington

Bruce Bartlett in the Washington Times recalls that Democrats once supported reducing taxes on corporate dividends. In fact, Jimmy Carter campaigned on a platform of eliminating the double taxation of corporate profits. He continued to advocate this after his election, and the New York Times supported him on this. However, Carter never proposed eliminating or reducing double taxation to Congress. Bartlett believes that this was because of “opposition from the Republican-leaning corporate community.” Among other possible reasons, businesses apparently were wary of creating pressure to pay out dividends. Bartlett concludes by setting forth the advantages to our economy of decreasing (or better yet eliminating) double taxation. He points to one study that estimates that the complete elimination of taxes on dividends would raise the Standard & Poor’s 900 index by 8.5 percent. And he notes that in New Zealand, where double taxation of corporate income was eliminated, corporate debt fell significantly.