Split-rate tax system

Split-rate tax system

A tax system that taxes retained earnings at a higher rate than earnings that are distributed as dividends.

Split-Rate Tax System

A tax system that taxes retained earnings (profits a company keeps) at a higher rate than the profits it pays out as dividends. This can encourage companies to have a lower plowback ratio and, instead, pay higher dividends.
References in periodicals archive ?
Brunori's final recommendation is a split-rate tax system that taxes land separately (and at higher rate) than the improvements on it.