Dividends

[Jordan Hayes]

So Bush is proposing to cut the tax on dividends.  I've always wondered
what was the justification for double-taxing them, but I'd think that if
you wanted to cut the tax on it you'd do it by making dividends be a
"return of capital" -- that is, lower the cost basis of the investment,
sort of like the principal on a bond.  But you typicaly don't buy a
security from the issuer; you typically buy them on a secondary
exchange.  Still: the dividend is just following the ownership trail, so
I guess that's okay.

I understand why dividends aren't expensed.  Can anyone shed some light
on why dividends are taxed in the first place?

Just because they can?

/jordan