I propose splitting the tax on dividends whereby the payer of a dividend may deduct half of a dividend paid from ordinary income provided the amount of the total dividend is less than 50% of the entity's net profit for the year the dividend is paid. A non-profitable entity may not pay a dividend.
The receiver of a dividend counts half of a dividend received as ordinary income and may not take deductions against dividend income. Effectively a new line is added on the tax form prior to the calculation of taxable income where dividends are recorded and added directly to the taxable income calculation. Dividends received by a non-profit entity are subject to a flat 15% tax ensuring a dividend is fully taxed once as a dividend is supposed to be the result of profit.