[JediWing]

Dividends are income. It's farcical that they are not treated as such in the US tax code.

I believe the point is that in the example above, someone living off their nest egg, able to do nothing, are paying less in taxes than someone still in the workforce, earning.

This exacerbates the concerns over wealth inequality because those who have built wealth, can then grow their wealth at a lower tax rate than those stuck at the bottom of the income ladder.

[hippich]

dividends are treated almost the same way. at least from tax rate point. now - you can offset dividends by other losses, but you can do similarly if you have just W2 income and run side business losing money (with few caveats)

EDIT: Thanks JediWing - I have no clue why I thought dividends are taxed at the same level. Thank you correcting me.

[JediWing]

Dividends are a flat 15% for earners under ~425k income, and a flat 20% for those over.

This means that a stock grant with a generous dividend is a loophole for high earners...in addition to simply adding complexity and magic thresholds to the tax code. It seems to me to be just bad policy.