Double taxation
Double taxation is a situation in which two or more taxes must be paid for the same asset or financial transaction.
Double taxation occurs in several ways. At the international level, it occurs between two countries due to overlap between their tax laws.
It also may happen at the corporate dividend level. Typically, a corporation pays income taxes on its profits, and may decide to issue a portion of those proceeds as dividends to its shareholders. Despite the fact that this money has already been taxed at the corporate level, when it changes hands to the shareholder, it's taxed again at the personal level. This is referred to as the dividend tax.
In 2003, President Bush lobbied to repeal the dividend tax, citing double taxation as the reason. A compromise with Congress resulted in the Jobs and Growth Tax Relief Reconciliation Act of 2003, which taxes most Americans at the 15% level, and low-income Americans at the 5% level.