From: John K Clark (jonkc@att.net)
Date: Fri Jan 10 2003 - 10:56:34 MST
"Robert J. Bradbury" <bradbury@aeiveos.com> Wrote:
>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).
Budget deficits are only really dangerous in times of high inflation, right
now the opposite danger, deflation, is more likely. Besides reducing the tax
rate does not necessarily mean reducing revenue. By the way, I don't know
why you put double taxation in quotation marks as that is exactly what's
happening.
>If it is really true that the dividend tax reductions are only going to
>be allowed in cases where companies actually paid taxes
More to the point dividends will only be tax free if the company actually
made money. A company that makes no money will pay no tax on
profits because it has none, but it still might pay out (taxable) dividends.
>it seems sure to complexify the markets in ways that people do not
>fully understand as yet.
I think it will simplify the market because you can use accounting tricks to
fake your profits and you can even fake your cash flow but you can't fake
dividends.
John K Clark jonkc@att.net
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