Change the tax laws.
Remove corporate income taxes and change Capital Gains.
Their have been several press articles lately proposing that corporate incomes taxes be removed in order to encourage business growth in the United States. There are more very good reasons to support this.
First is that corporations are not people. They are a legal contrivance that seems to create a legal individual. Even bankruptcy refers to the "estate" of the company as if it was a deceased person. There are valid and good reasons to the creation of these corporate individuals but taxation is not one of them. Part of the problem is the so called double taxation of income. Once when the corporation reports the profit and again when a true individual (the stockholders) reports the dividend (which is the profit transfered to them) to the IRS. While most everyone believes that double taxation is illegal it isn't in practice and that is the subject of another discussion.
By eliminating corporate income taxation all of the profit would be transfered to the stockholders. (You in the back. Put your hand down and hold on for the rest of the point) Companies that don't pay dividends would actually have more cash (the tax money) that could push them over to the dividend paying group. Also, if they don't pay out the saved money that ether directly raises the value of the company or can be used to even further increase the value of the company through expansion.
Eliminating corporate income taxation will increase the amount of money/value returned to the stockholders from another source as well. With a few (very few) notable exceptions the CEOs and/or boards of corporations control how millions of dollars are given to charities. These millions of dollars are the stockholders but they get virtually no input on what charities benefit because they only vote for a board. They have to elect board members from a few brave enough to run for the board and focus more on how well they will run the overall corporation.
Warren Buffet of BERKSHIRE HATHAWAY INC. was one of the very few that made a reasonable attempt to take the tax advantages while letting the stockholders actually control the donations. To summarize, the company would declare how much total money was going to be donated and the stockholders would individually allocate what specific charities the company whould write the checks to. I said "was" because when he made one of his acquisitions the former owners had a deep objection to one of the charities that had been well supported by Berkshire stockholders. So to keep the peace of the stockholders he had to discontinue the program.
Without income taxes there is nothing to deduct donations from and no corporate advantage to making donations. Therefore, that money becomes available to increasing dividends or company value. It also puts that money back in control of the rightful owners of that money and forces charities to sell their value to the public instead of trying to influence just a limited few who usually feel the money isn't really coming out of their own pocket.
OK, that still leaves the companies that don't pay dividends or pay only a small portion of the profits in dividends. The stockholders are still receiving the profits in increased value of the company which is reflected in the value of their stock. If they aren't then one of two things are happening. First there are no real profits. The second possibility is that other investors believe that the profits are not being used to increase the value of the company.
This leads into another tax problem. Capital Gains. Many people are concerned when they sell stock or real property that taxes are assessed on the entire increase in value that may have occurred over decades. They see this large chunk of money (in some rare cases nearly half) going to taxes. If they look at the increase in value each year and what they would have paid in income tax each year on that increase in value they would see that the current Capital Gains is actually one heck of a discount for most taxpayers. Currently there are two brackets for Capital Gains so there is a potential problem with falling into the higher bracket. Since Capital Gains uses a base value which is what it cost to acquire the assets and sometimes the expenses in keeping it up I am proposing a way to step up that basis. When ever the owner feels that it would be to their advantage they could adjust the basis to their current appraised (independent authority) value and pay the taxes on that adjustment. This would allow them to effectively spread the cost over time as well as try to avoid having some of it fall into the upper bracket. Just as paycheck withholding spreads the annual tax bill over the year so you avoid the shock of one massive payment each April 15th, this avoids the current massive payment when the asset is sold. The painful part of this is that the cash to pay the tax bill doesn't come from the sale of the asset and has to be produced from some other source. Just like conversions to Roth IRA's.
http://www.notesfromthefarm.com/article.php/2005100909212637