Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Raymond Duray who wrote (27144)	1/8/2003 4:23:27 PM
From: energyplay	Read Replies (1) of 74559

I just read some where that Jimmy Carter tried to end taxation of dividends. Outside of the progressivity and fairness arguments, having different tax rates for Capital gains (20%) and dividends (up to +38%)does create distortions and makes it harder to move capital. As an example- Intel has 12 Billion cash, Microsoft 40 Billion, Cisco 9 Billion and Oracle about 5 Billion. Intel is capital intensive and new Fabs cost 1.5 Billion each, so they may need most of that. The rest could easily distribute 1/3 to 1/2 the reat in dividends, where it could then go to other investments, like biotech, wireless, energy, etc. Or the consumer holders could use it to pay down their credit card debt. Or the pension fund operators could use it to fund their pension obligations. I don't think Microsoft or Intel really needs to increase marekt share ;-)

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