Message Font: Serif | Sans-Serif
 
No. of Recommendations: 3
me: I disagree. In 2000, (the most recent year for which data 
are published) there was $142billion of dividend income reported on 34 
million individual income tax returns. That averages out to 
$4000/return or a probable savings of more than $1000 for someone in 
the 27% tax bracket. If you consider all returns, there were 129 
million returns or about $1100 of dividend income per return. This is 
not a small number.

Foobarista: But you are making the communistic assumption of 
flat income distribution :) ...

me: Fair criticism... perhaps. Here's the actual distribution:

     AGI        # returns   # Div returns   Dividends    Div/return
     ($)        (000,000)     (000,000)     ($000,000)     ($000)

total            129.3          34.1          142.2         4.17
under 15K         38.6           5.5            6.6         1.2
15K-<30K          30.1           4.4            8.3         1.9
30K-<50K          24.0           5.6           11.6         2.1
50K-<100K         25.7          10.7           27.3         2.6
100K-<200K         8.1           5.4           27.2         5.0
200K+              2.8           2.4           61.3        25.5

As expected, the distribution of dividend $ is skewed toward the 
wealthiest taxpayers as is the percentage of returns at a given AGI 
level that include dividend income. However, it's interesting to note 
that as a percentage of AGI, dividend income is as significant for the 
lowest income bracket as the highest, running at ~10% of AGI.

Ultimately, the tax code is financial social engineering. It won't ever 
be "fair" or optimal.

Ira

BTW, Anybody know how to mix proportional and fixed-width fonts in the 
same message?
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.