2Mar$, another excellent article! Thank you. One of the first paragraphs that really struck me (but then as I read, the whole article really was impressive) was this:
The state of California has done a detailed study of its own budget issues, finding that 21% of California's tax revenue comes from the stock market. The study looked at the largest companies in the state and used their data on options exercise and state data on capital gains and 401k and similar distributions. The entire 2000 California budget surplus can be accounted for by capital gains and stock option exercise at Cisco Systems Inc. alone. If the stock market fails to rebound quickly from its current malaise, those gains will not be there to be taxed, at either the state or federal level.
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So if large companies, states, and even the federal government are basing some of their income on revenues expected from the market, there is going to be a bit of a surprise for many. Bush may have a tiger by the tail with those forward projections. If there is such a surplus right now, the government could do well by not giving the American public back ~$300 each, but instead paying more towards the national debt. With our proven track history of NOT SAVING, I can't see the public putting this return of money to good use like paying off their own debt. Instead, I see them going further into debt by putting the money towards the downpayment on that motorboat they wanted for the summer! :( |
