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Politics : Politics for Pros- moderated

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To: LindyBill who wrote (438530)	8/2/2011 3:29:36 PM
From: t4texas	3 Recommendations Read Replies (1) of 793534

why does nocera get this wrong. roosevelt wasn't trying to rein in federal spending. roosevelt was raising taxes in the most destructive way. i investigated this "undistributed profits tax" of 1936 maybe a year ago to understand what kind of egregious tax increase caused the econonomic decline in 1937. i have provided anyone who wants plenty of details on it with links below. basically the fed govt. wanted to get its hands on profits corporations had that were not distributed as dividends to shareholders. the tax rates were just terrible for corporations to make any investments in much of anything. the rates were so high (see the 1st link below, and other of the links have the numbers in less of a nice table form) that companies were forced to give away most of their profits (much as REITs do today, and you know how REITS do not grow much at all, if any) or have them taxed away by the govt. just imagine this. apple has about $70B in cash that i will call retained profits. in 1937 apple would have to pay over $49B in extra tax in addition to any other profits apple might have, or apple would have had to distribute almost all that $70B as dividends in 1937 to avoid that undistributed profits tax. then the receivers of that dividend money from apple would have paid dividend taxes to roosevelt's new tax. that should give you a picture of why the decline in biz happened in 1937. it had nothing to do with decreasing federal spending in my, admittedly small sized, brain. en.wikipedia.org undistributed profits tax patriottaxsolutions.com jstor.org benjamin graham article in yale law mag on undisty profits tax -- maybe someone on this thread can get the entire 19 page article from yale to see what benjamin graham wrote about the tax in 1937. taxhistory.org taxhistory.org

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