Software giant Microsoft Corp., finally bowing to mounting pressure to return some of its huge cash hoard to investors, said it will begin paying a regular annual dividend to shareholders.
The surprise move, coming on the heels of President Bush's recent proposal to eliminate the federal tax on dividends, represents a big shift for the nation's most valuable high-tech company, which for 17 years has spurned the idea of a dividend in favor of plowing cash back into product research and development.
Top Microsoft executives, however, could see their income rise soon because of the newly declared dividend. Chairman Bill Gates, who held 621.7 million shares of Microsoft as of Sept. 9, or 11.6% of the company, could expect an annual dividend check of $99.48 million. For chief executive Steve Ballmer, who holds 235.5 million shares, dividends would amount to $37.68 million.
Those attractive piles of $99 million and $37 million (try to picture them, in small denominations, in your living room) are tax-free under the ultra-generous Bush plan.
Generous to a very select few, that is. Even a truck driver with a winning Powerball lottery ticket has to pay substantial taxes on similar amounts of money. Why? He didn't work for it! It's unearned!
Why do these two already-rich men — and others like them — deserve to pay not one dime of taxes on an unearned sum of $136 million? Is it just for being alive at the same time as a dim-witted (or evil, take your pick) president?