Random commentary and senseless acts of blogging.
The first Republican president once said, "While the people retain their virtue and their vigilance, no administration by any extreme of wickedness or folly can seriously injure the government in the short space of four years." If Mr. Lincoln could see what's happened in these last three-and-a-half years, he might hedge a little on that statement.
Prisoners of Azkaban
Thursday, January 09, 2003
Seeing It Through points out a few of the obvious flaws in eliminating taxes on dividends. Here is another one, which also took only a few minutes to think up: senior executives can arrange for their compensation to be in stock of a specially-created subsidiary whose only function is to funnel out large dividends. That switches most of their income from earned income to dividends, so they now pay no income taxes.
This article suggests that some of these problems may be anticipated in the structure of the Bush plan. But it also means that the plan adds more complexity to the tax code than seemed apparent at first.