From: Robert J. Bradbury (bradbury@aeiveos.com)
Date: Fri Jan 10 2003 - 04:38:06 MST
Hmmm, when I initially read about the Bush approach to reducing
the "double taxation" of dividends I thought it was really silly
(given the budget deficits the U.S. appears to be facing). But
this article:
"Bush Offers a Break if Companies Pay Taxes"
Floyd Norris, NY Times, Jan. 10, 2003
http://www.nytimes.com/2003/01/10/business/10NORR.html
makes me suspect there may be more here than initial simplistic
presentations seem to present. If it is really true that the
dividend tax reductions are only going to be allowed in cases
where companies actually paid taxes, then the equation for
corporate management is going to get a bit more complex --
e.g. do you you raise pre-tax (and perhaps post-tax) earnings
in ways (e.g. clever tax reduction strategies) that do not translate
into increased dividends or do you raise post-dividend earnings for
the stockholders?
If this representation is accurate, it seems sure to complexify
the markets in ways that people do not fully understand as yet.
Robert
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