This is the part the people miss, they all "work" on each others boards. It is a you scratch my back, I'll scratch yours deal.

Most dividends are qualified, which are taxed as long-term capital gains are, at least federally.

But they aren't deductible for most companies, which disincentives them from paying them (they'd rather give that money to the C-suite as bonuses, and this is their excuse: tax efficiency.)

Dividends should be deductible against corporate income, which would eliminate this issue.

"should be" - why? They're not an expense relating to producing income. COGS, cost of sales, overhead, etc are all related to producing income and so are deductible.

Dividends to me are an outcome of already earned income.

Yeah, I can see how would think about it that way if you get hung up on the idea of deductions as expenses. What I would prefer is if companies acted more like LLCs/flow-through entities, where all profits or losses flowed through to the owners, in proportion to their ownership stake.

Making distributions (dividends) deductible against the corporate tax burden allows companies to closely approximate this. It would encourage them to return cashflow to investors, which is the point:

Investors (in theory, owners) should participate in the cash flow of the companies they own, rather than bank on the capital gains/share prices leverage casino.

Rarely any influence? Interesting theory, except, shareholders can, you know, fire and hire the board members at will.

The fact that "activist shareholders" is a term that people have to use suggests that shareholders rarely do that.

Perhaps because, they're largely happy with the terms of there arrangement?

You should probably stop making assumptions as to why people do (or do not) make a choice. Ideological rationalization on your part does not create motivation for someone else.

That's hysterically naive or extremely disingenuous.

Why? Do you consider shareholders to not be smart enough to make their own decisions?

That's no more relevant to the problem at hand than asking if the populace is smart enough to elect good politicians. The public choice problem, costs are diffused, benefits are concentrated, is still there.

Focusing companies on paying dividends via policy choices would alleviate much of the problem.

I think you're severely understating the difficulty of getting a huge group of people to act like that against something seen as the status quo.

Your comment follows essentially the same logic as saying to somebody complaining of Government corruption, "citizens can just start a revolution and remove the Government at will - so if they haven't, they must all be perfectly happy with the Government."