Individual Investors-Taxes

@RaviVooda In case of common progressive, some investors who fall in the lower tax brackets might be taxed less. However, when it comes to “Heavy Dividend Tax Regime”, all returns earned in the form of dividends are taxed heavily, so the government assumes a fair amount of investment risk. Just like @Vincentt mentioned above, it does not take into account the earning brackets.

@RaviVooda No Probs dude

@RaviVooda Just got this message. Yes, I agree with (B) for the reasons listed.

I’ve not touch the questions in taxes yet, but I guess common progressive tax will have less investment risk because it’s progressive. The same amount of invested assets held by a low and high income earner will have different tax brackets. So the effective investment risk to the government varies. Also, if you held the investment forever, you will not get taxed. Also, remember how much tax you can save if you use a Tax-Deferred Account – paying capital gained tax at the end.

As for dividend tax (which is paid upon receiving), it does not take your earning brackets into account, it’s a flat rate on the dividends that you received.

Therefore, the effective tax value on dividend income to the government is higher.

no prob mate @RaviVooda‌