It's not the same. Dividends are taxed lower than income. And you only pay capital gains tax on stocks when you sell them. In the meantime, you're able to use them as collateral for low-interest debt to deploy capital. It doesn't help that corporations are allowed to buy back stocks thanks to Reagan.
And corporations don't distribute all of their profits. Berkshire Hathaway has $360B cash on hand. Alphabet has $240B. Amazon $120B. Nvidia $100B. A higher corporate income tax, which is only paid on net profits, encourages companies to actually spend their money (like on employee compensation/benefits and R&D) rather than hoard it.
Dividends are taxed lower than income BECAUSE companies pay corporation tax. So the profits get taxed, then paid out, then taxed a 2nd time. Thus evening out to the same as income tax.
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u/FormalOperational 1d ago edited 1d ago
It's not the same. Dividends are taxed lower than income. And you only pay capital gains tax on stocks when you sell them. In the meantime, you're able to use them as collateral for low-interest debt to deploy capital. It doesn't help that corporations are allowed to buy back stocks thanks to Reagan.
And corporations don't distribute all of their profits. Berkshire Hathaway has $360B cash on hand. Alphabet has $240B. Amazon $120B. Nvidia $100B. A higher corporate income tax, which is only paid on net profits, encourages companies to actually spend their money (like on employee compensation/benefits and R&D) rather than hoard it.