In the US, the idea is that corporations make as little profit as possible. When one makes excessive profit, a good portion just goes away as taxes. -- Will

I do not know the details, but the idea is to take the profit before taxes and either shovel them back into the company in some fashion, manage to write them off as some sort of loss, and/or let the shareholders take it. It is much easier for individual shareholders to shelter themselves from taxes, and isolates the tax liability. -- Will, not an account

Teo Zenios wrote: Yes, that happens, for sure, but to return to the the OP's question: Dividends are paid out AFTER all expenses (including taxes) are otherwise accounted for. Dividends are paid out of profits, not revenues, if you get my meaning, since the dividend is a distribution of 'net income' to the company's owners, that is, the shareholders. The company first must pay taxes on its gross income, leaving net income to be distributed to the shareholders according to the determination of the board of directors. Dividends, indeed, are a perfect example of double-taxation. Of course, YOU have to pay taxes, too, on any dividends that you receive as a shareholder, thus the 'double-taxation' comment. And dividends are always considered to be short-term returns, thus are taxed at your normal tax rate. As was mentioned, a corporation WANTS to minimize income, trying to shuffle off as much as possible as an expense, thus minimizing the taxes, and if these 'expenses' are bonuses to employees (including the CEO, for sure), well then that can be treated as an expense, before taxes come into the picture. At least bonuses to employees are only taxed once, as income to the individual. As an investor, these days (unlike the 60's and 70's), rightly or wrongly, dividends are usually not considered to be all that important, since most investors now are just looking for a run-up in the stock price, and a capital gain. In fact, our present tax laws make us want this, due to the double-taxation effects of dividends, and the fact that long-term capital gains are taxed at a lower rate than 'personal income' (short-term income). No, I'm not an accountant, but I have some experience with these matters - Jared [sorry, Jay, for the OT nature of this post]

Sridhar Ayengar wrote: Nothing. If that were to be possible for the large-ish corporations out there, I'm sure that would be a preferred route to take. But there is no way that a Mega-, Large-, or even a Mid-sized corporation could have thousands of shareholders on the payroll! ;-) Besides, what are you going to have 80-year old Mr. and Mrs. Doe do for you if you are a Gulf of Mexico oil exploration outfit? :-o - Jared

One can hope that the acquiring coompay will be good about retaining the history of Tektronix. Tek has been pretty good about keeping its own internal history well-documented (but not well-publicized) over all these years. I feel sad that they're been acquired by a multi-national conglomerate. Tek, though it has in recent years, outsourced a lot of manufacturing, has been a mainstay of US-based quality design and manufacturing, especially in electronic T&M (test & measurement) equipment. Having worked for Tektronix from 1977 to 1990, I feel a real affection for the place. By 1990, it was just a shadow of the company it was in the late '70's, with lots of layoffs between '86 and '90 (and more afterwards), and a lot of consolidation and associated financial difficulties. I hope that whatever happens, the new owners will A) take good care of the current employees, B) take good care of retired Tektronix employee pension and retirement plans, and C) work to retain the historical and cultural aspects of Tektronix. For Oregon, if the deal goes through, it's definitely the end of an era. Tektronix was the catalyst for what became the 'Silicon Forest', and being a major part of the rescue of Oregon's economy as the timber business fell apart as a result of government controls and environmental concerns. For a long time, Tektronix was the second largest employer in the state of Oregon, only behind Pacific Northwest Bell/AT&T. Rick Bensene The Old Calculator Museum http://oldcalculatormuseum.com