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Is 55% marginal tax rate on small business dividends killing business expansion and job creation?


Well-known member
Apr 11, 2007
Small businesses thinking about expanding are faced with several major risks:

-weak markets in the depression which call for great caution
-lack of bank credit which is critical for businesses that need revolving bank loans to finance inventories and trade debtors
-high loan losses on trade debtors
-high fixed charges for commercial rates on new premises that may not generate a profit for a long time

If the business makes a profit after taking all these risks,the business owner must give 55% of profits paid out in dividends to the tax man. Many business people would think,why bother?

That attitude will kill a lot of business expansion and job creation.

If the government raises more tax,it should impose a health tax on the unhealthy products that take up half the space of supermarket aisles-sugary products such as fizzy drinks and confectionary and products high in salt such as crisps and prepared foods.