I'd vote for that, pueo!
I would imagine the dividend exemption would in very short order result in an increase of companies paying dividends, and that it will further stimulate purchase of those and other stocks, thus growing the stock market and easing pressure on business. Benefits directy acruable to business will stabilize employment and encourage additional hiring. A more fully employed economy will increase demand for goods and services, generating not only economic growth but real increase of tax-derived government income; more income earners are more taxpayers and more successful businesses pay more taxes ... in real dollars, not merely percentages and ratios. Everybody benefits.
timber
for the past 2 days i have listened and read everything i can find about these economic plans and the only conclusion i can make is that no one, no economist, no government spokesman, no professor of economics and no businessman has a clue what will result from either of the offered plans.
timberlandko wrote:I'd vote for that, pueo!
timber
me too!
uh, what did i say? :wink:
good thread c.i., just reading and passin' through.
Well, we know that doing nothing will not help, and that nothing we've done so far has helped, and that it is time to try something different. I think we all agree we must do something, and do it now. I do not see innovation or reform in the Democrat's product. The Republican product claims both in its list of ingredients. I would like to try the product and test its claims.
timber
timberlandko wrote:I'd vote for that, pueo!
OOOOOPS!
Sorry, folks .... engaged keyboard before brain had come to speed.
timber
tim, Most companies do not pay dividends simply because they do not have profit. Those that have $$$$, should use it to improve their productive capacity with new machinery and equipment. That's how they can stimulate the economy. I think there are 35,000,000 investors that own dividend paying stock funds. What happens to the other 240,000,000 without stocks? c.i.
from what i gathered watching PBS News Hour tonite the lack of tax on dividents in itself would have zero effect on the economy but would increase the stock values between 5% and 10% which would be a boost to the stock market possibly resulting in increased investments.
dys, I'm very skeptical of those analysts that claims the stock values will increase by 5 to 10 percent just on the basis of non-taxable dividends. If you know anything about the market, it's still over-valued by about 15 percent. c.i.
c.i. i really have no idea that only what i heard tonite on PBS its all a mystery to me.
cicerone imposter wrote:tim, Most companies do not pay dividends simply because they do not have profi.
I disagree, c.i., many firms ceased paying dividends in relatively recent times in response to increased volatility in the equities market. It was seen as better for corporate health and stock-value growth to retain profits rather than distribute those profits to the shareholders. The thinking was the shareholders would find more value in higher stock price than in profit participation. The "Double Taxation" of dividend interest was a strong factor. Post-tax shareholder revenue was not competitive with shareholder profits to be obtained by ever-increasing stock prices. In a declining or relatively unresponsive market, dividend income paid does far more good for a shareholder than the unrealizeable gain and realized loss of lowered stock value.
I don't want to ramble; I can really get going on this ... but there are lots of reasons I favor the Republican Proposal. And lots of Democratic arguments I consider specious at best. But in the long run, the Republican Product is the least objectionable offering on the table. It is not perfect, I simply see it as having fewer flaws.
timber
New Haven and cicerone have brushed up against the bias toward the wealthy, and against the working class, that Bush's plan reprepresents.
Eliminating dividend taxes overlooks a huge population of taxpayers: more than 40 million people who put money into tax-deferred individual retirement plans like the 401(k) plan.
Neither the money set aside in a 401(k) plan nor the dividends that accumulate are subject to any tax until a person withdraws the money after reaching retirement age.
But when a person does withdraw money, the government taxes ALL of it as ordinary income ?- regardless of whether the money came from dividends, stock market profits or the person's original contributions.
In effect, that means that people who buy stocks and accumulate dividends in a tax-deferred retirement plan will eventually be taxed on those dividends. But the much smaller number of people who currently pay big taxes on dividends will get a big new break.
Are we all clear on this? If you can afford to have investments outside of a 401(k) then the dividends on those investments are free and clear according to the Bush plan.
But, if you are like the rest of us working-class saps and have your investments tied up in 401(k)s, IRAs and other similar investment vehicles then the dividends on those investments are counted as normal income and you will have to pay taxes on it when you withdraw the money.
Looks like the only thing the Bush administration wants to tax are the poor, the middle class, and the old maxim that no one ever went broke underestimating the intelligence of the American people.
"Today, a senior administration official confirmed that the government would not change the rules and that stock dividends earned in 401(k) plans would indeed be taxed as ordinary income when it is withdrawn.
"They didn't get taxed when it was going in," said the official when asked about the issue today. "It all works out in the end," she said. "Trust me.""
You'll forgive me if I don't feel all that trusting right now.
Whoever that "she" is, her head is screwed on like GW's.
Dividend income for the rich will be exempt from taxes, but will be taxed for people who have 401k's and IRA's, and "she" has the mitigated gall to say "It all works out in the end." Yeah, for who? The American people have been hoodwinked by the GOP for so long, they don't know the difference, because they're too lazy to see the forest for the trees. c.i.
BTW, "Her" "trust me" statement is beyond gall.
c.i.
Yeah, trust me. Reminds me of a line in "Gangs of New York" when Boss Tweed assures an underling about the results of an election that day. "It's not about how the votes are cast," he explains, "It's how they're counted."
Which, come to think of it, brings to mind a recent national election. Not that it relates to this discussion, of course!
I don't want to ramble; I can really get going on this ... but there are lots of reasons I favor the Democratic Proposal. And lots of Republican arguments I consider specious at best. But in the long run, the Democrat's Product is the least objectionable offering on the table. It is not perfect, I simply see it as having fewer flaws.
BillW, On this issue, you and I agree! Happy Days.
c.i.
