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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.


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