The dividend tax is the tax
on corporate dividends.
President George
W. Bush proposed in 2003 to eliminate the U.S. dividend tax.
Critics argued that doing so would have little effect for the bottom
60% of wage-earners, and greatly reduce taxes for the upper 20%.
Supporters pointed out that the bottom 60% of wage-earners already
pay little in taxes.
After months of wrangling, the U.S. Congress passed the Jobs and
Growth Tax Relief Reconciliation Act of 2003 that included some
of the cuts President Bush requested. He signed the bill on May
28, 2003. The law specifies that dividend income will be 50% tax
free for 2003 and then 100% tax free for 2004-06. After that, the
law is reverted, and standard income
tax rates will again apply to dividend income.
In the Netherlands there is a tax of 1.2 % per year on the value
of the shares,
regardless of the dividend.
