Why would anybody need dividends? : personalfinance

by akoloy

If I perceive accurately, if particular person A invests in a mutual fund that will get dividends and re-invests all earnings, and particular person B invests in a mutual fund with out dividends, particular person B has a barely simpler time submitting taxes, and likewise has decrease taxable revenue. This is, in fact, assuming every thing else is an identical between the 2 eventualities (which in actuality it hardly ever is).

Person B solely has revenue when she chooses to promote shares of firm B, whereas particular person A has to tax revenue taxes each time she receives a dividend, in addition to every time she sells shares.

What am I lacking right here? If dividends make submitting taxes extra burdensome and likewise trigger individuals to pay extra taxes, why does anybody need dividends?

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