Actually, I have a choice of paying myself a salary, bonuses, or dividends. The dividends are taxed twice, since thay are not an expense to the corporation (ie, they come from post-tax earnings) and then I'd have to pay personal income tax on whatever I get. There is a reduced-rate loophole on the personal tax rate that expires this year. Overall, paying dividends is not a good deal for a small corporation. It works fine for GE.
The US tax structure seems designed to kill small and mid-sized businesses. It's working pretty well.
**********************************John Larkin, President Highland Technology, Inc
jlarkin at highlandtechnology dot com
Precision electronic instrumentation Picosecond-resolution Digital Delay and Pulse generators Custom laser controllers Photonics and fiberoptic TTL data links VME thermocouple, LVDT, synchro acquisition and simulation