Floyd Norris had an article in the New York Times today on the debate about eliminating the so-called "double tax" on corporate dividends. This is a terrible idea, and there’s no such thing as double taxation.

The theory goes that just because a corporation pays taxes on its income, then pays dividends to its stockholders and those stockholders pay tax on those dividends, that somehow that constitutes "double taxation."

But who pays twice? Nobody! The corporation pays tax on its profits; that’s just income tax with too damn many deductions. Then the individuals pay income tax on their dividends, even though they haven’t done any work to earn that money. And P.S., the stockholders also get too damn many deductions.

That isn’t double taxation any more than taxing the shopkeeper on his business income and then taxing the employees on their wages. All the corporate bigwigs who already have more money than they need like to make this comparison just because the shopkeeper gets to deduct the wages before paying his business income tax.

So how are they gonna eliminate this "double tax"? If they tell corporations they don’t have to pay tax on their income, then that’s corporate welfare. If they say investors don’t have to pay tax on their dividends, that’s just a tax cut for the rich.

Ideally, not only would the corporation pay tax on its income without a deduction for dividends paid; stockholders would also have to pay tax on their dividends without taking any deductions to reduce the tax. Stockholders already have enough money.

Maybe the solution is just to say nobody can own stock in any companies. That’s just a method for rich people to get richer and make money without having to work. And as everyone knows, when the rich get richer, the poor get poorer.

If we’re going to cut taxes at all, then the lesser of evils would be targeted tax cuts. That way people would only pay lower taxes if they spend their money appropriately.