"Pushing the prices of these stocks up with tax-free dividends will not do anything to create jobs."
Companies with losses or those that use various techniques that eliminate taxable income will find they have no tax-free dividends to hand out.
Just how much a company could pay in tax-free dividends would be based on the taxes it actually paid.
Also, they can own shares in other corporations and receive corporate dividends 80% tax-free.
That is because an investor, to get the tax-free dividend, would have to own the shares at the time of the payment.
The proposal takes pains to block companies from awarding tax-free dividends if they are already using other tax breaks to avoid paying corporate taxes.
The revised proposal will also make it possible for some companies to pay tax-free dividends even when they are losing money.
Under the Bush plan, companies that pay corporate income taxes will be allowed to distribute tax-free dividends to shareholders based on the taxes they paid.
The spinoff of the rest of the business will come in the form of a tax-free dividend.
These investments produce about $3,000 a year in tax-free dividends and other income.