agreed, but in no other case is an income tax levied twice on the same owners of capital...hence why people refer to it as double taxation.

interestingly, the total federal rate paid on dividends = 1-(.65*.85) = 44.75%. I wonder how this compares to the total individual income tax rate (including soc sec/medicare/etc) and at what points in the individual income tax schedule is one rate more favorable than the other.