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Technology Stocks : The New QUALCOMM - Coming Into Buy Range
QCOM 175.07+2.6%3:59 PM EST
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To: golfinvestor who wrote (5880)2/11/2010 10:21:24 AM
From: Art Bechhoefer  Read Replies (1) of 9129
 
GI--Yes, dividend taxes are a form of double taxation, right or wrong. And no, I'm not an Obama advisor because his advisors are chosen mainly for their conventional orientation. Just look at the Treasury secretary and the chief economic advisor.

As I have noted many times on these threads, the way to reduce the double taxation of dividends is to reduce the corporate tax, allowing the corporations either to distribute more in dividends or to lower their product prices accordingly. A lower corporate tax is also anti-inflationary, in the sense that it discourages unprofitable investments. A corporation paying the 35% rate effectively gets a 35% discount on its investments or acquisitions. Thus, if it believes it can make 10% on an acquisition, it need only generate 6.5%, since the rest is effectively a taxpayer subsidy.

A corporate tax such as ours is also anticompetitive in the sense that other countries, especially in the European Union, use a value added tax to generate taxes from the private sector. A value added tax applies only to domestic sales and is deducted from exports. We would be far more competitive if we restructured our corporate taxes accordingly.

Not even the most conservative opponents to the administration dare advocate a reduction in the corporate tax. So we'll have to leave it there.

Art
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