Free marketeers in the U.S. are currently arguing in convincing terms that taxes on equity dividend payments should be scrapped. This, they argue, would end many of the pressures to inflate corporate accounts and the kind of shenanigans currently roiling the financial markets around the world. It is an interesting point, and made in great detail by blogger and economics writer Brink Lindsey.
Lindsey points out that the current problems in the financial system are a result of government intervention, such as restrictions on hostile takeovers, rather than laissez faire. Hostile takeovers, as he explains, actually keep management on their toes and can prevent, rather than cause, the kind of abuses that happened at Enron.
So perhaps we need more Gordon Gekkos and fewer Harvey Pitt’s (head of the U.S. SEC). Not an argument one is likely to read in the New York Times.
