Under current tax law, for every dollar of profits earned by a company, Uncle Sam keeps 60 cents and the private sector gets only 40 cents. Yet if the White House reduces the dividend tax rate for individuals to 20% from today’s 39%, leaving the corporate tax rate on dividends untouched, the private sector will keep 52 cents for each corporate dollar of profit. Rather than the bulk of the money going to Uncle Sam, the risk-taking investor class will be rewarded with the larger share.
The Bush economic team has been largely divided since its formation almost two years back. Last September, the team’s supply-siders