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To: Snowshoe who wrote (24899)	11/2/2002 7:29:44 PM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hello Snowshoe, <<End to Double Tax (On Dividends) Could Spur Rally>> is a maybe. If double taxation is ended, and most companies cannot cough up dividends in the amount demanded (because it is difficult to fake dividends), then the stock price of those few which can maintain or increase dividend will benefit, while the majority may simply plunge as investors realize the utter hopelessness of their current holdings. The higher dividend payers from emerging market-space may zip up in price, especially the simpler businesses. Chugs, Jay

To: Snowshoe who wrote (24899)	11/3/2002 9:25:35 AM
From: Moominoid	Respond to of 74559

<There are several dividend-tax reform bills before Congress now. One is HR 5323, which would provide individual shareholders a credit for federal income taxes already paid on the dividends they receive. In addition, HR 5463 and 5413 would allow corporations to deduct dividends paid. HR 5466 would exclude from individual taxation 55% of dividends received, and HR 5413 would tax them for individuals at the less-onerous top capital-gains rate.> HR5323 is what we have in Australia and NZ and makes a lot of sense (the others are illogical). The downside of the "imputation system" is that capital gains still represent double taxation. The tax credits can only be got out via dividend payouts. This means that Aussie companies pay out high dividends and then have to borrow to reinvest in the business. They also conduct various off-market buybacks of shares. For example Commonwealth Bank offered to buyback shares at $28 of which $10 was a return of capital (the IPO price) and $18 was a special dividend. If you bought at above $10 you could claim a capital loss. The $18 dividend came with a 36% tax credit attached (i.e. $9.27 per share) which you could deduct from your tax bill. It was way cool.... David