Semi-Equips - Buy when BLOOD is running in the streets! Message Board

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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 155.15

+2.1%

Nov 26 3:59 PM EST

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To: Ira Player who wrote (9958)	6/11/2001 8:38:17 PM
From: Zeev Hed	Read Replies (2) of 10921

I agree with you, that means that management cannot find good investments that will have high internal rates of return. Yet, most big companies have resorted to big buy backs (MRK was about $8 B untaxed dividend over two years), just to circumvent the double taxation. The solution, IMHO, is to either not tax dividend, or make the dividends tax deductible to the corporations as interest charges are. After all, true dividends are a fee for using stock holders' capital, why should interest on bonds be deductible (and taxed to the recipient) and dividends not deductible (and still taxed to the recipients?). That situation brings companies like IBM and MRK to borrow against their very good credit, not for expansion but to pay tax free dividends via those buy backs. This causes "mis allocation" of capital, which ever way you look at it. Zeev

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