Tom the Dancing Bug by Ruben Bolling for March 08, 2003
Tom the Dancing Bug by Ruben Bolling The Bush tax plan proposes to eliminate the insidious DOUBLE TAX! This double tax occurs when income that's already been taxed gets taxed again when it's transferred to another person or entity. Look at the following chain of transactions and... CAN YOU SPOT THE DOUBLE TAXATION? A EMPLOYEE receives paycheck and is taxed on the income. B EMPLOYEE uses some of that income to pay his PLUMBER, who is taxed on that income. C PLUMBER uses some of that income to buy DVDs from SHOP OWNER, who is taxed on that income. D SHOP OWNER uses some of that income to make a car payment to his BANK, which is taxed on that income. E BANK uses some of that income to pay a dividend to STOCKHOLDER, who is taxed on that income. F STOCKHOLDER uses some of that income to tip CADDY, who is taxed on that income... That's right, the answer is E (The transaction that involves the taxation of wealthy people!) The payment of DIVIDENDS is the unique phenomenon in which the I.R.S. taxes income that's been previously taxed by another, separate person or entity!
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