Danny,
And when they (Congress) close this loophole, they will kill this bull market just like they did to the RE market in 1986. So, are we safe until then? What are the early warning signs to look for?
Zeev is going over board calling this a "loophole" or "tax evasion". On the other hand, it really is shareholder rape. US government taxation of dividends has actually gotten tighter - an individual can no longer exclude the first $100 in dividends per man and woman. Plus, the amount of cash dividend receivers that would actually be subject to taxation is likely under 50%(?) i.e., all the retirement and pension funds, 401(k)s and so on, are not taxed on dividends. To top it all off, the companies doing the buybacks are just giving away the buyback benefit to insider option holders anyway. Ever notice how total outstanding shares never go down?
But you are right if congress closes stock repurchases down; although I scratch my head to figure out how they are going to do it from the "tax theory" standpoint (although this, along with fairness and truth, is pretty much a fiction since the late 70's anyway). -nfg-
What are the early warning signs? I'd put my money on new noises on stock option plans from the gutless AICPA, SEC, IRS or congress.
Regards, DWW |
