Tom, regarding the tax plan impact on QCOM, it would do a very imperfect and inefficient job. Those individuals or institutions that own the stock either in deferred tax or tax-free accounts would not really benefit, and that's quite a large number of shares. As to encouraging a company to pay dividends and encouraging the purchase of stock rather than options by company employees, there are some complications.
Whether a company pays actual dividends or "deemed" dividends (i.e., retained earnings to be invested in new projects), it is in the company's interest to keep costs down, including the added costs for expensing options when issued. The tax plan ENCOURAGES companies NOT to expense options, in order to create the type of net earnings that would lead to tax free dividends or similar cost basis adjustments for capital gains purposes.
A company should have the right to decide on whether to pay dividends, invest more in growth, or, a third alternative you didn't mention, buy back shares. The least complicated way of doing this, and the way that distorts the whole picture less, is to lower corporate taxes. Even The Economist agrees with this approach over the cut in taxes on dividends. Given that large portions of dividends paid out by other companies are untaxed right now, the proposal is simply inefficient.
Finally, the proposal would DISCOURAGE individual investors from owning interest bearing securities, like corporate bonds, because this income would remain taxable. This would reduce the market for bonds of all types, including municipal bonds, and thereby increase the cost of borrowing for corporations AND municipalities. When you look at all these distortions, you begin to see why the proposal is half baked.
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