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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved