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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (16095)	1/6/2003 11:02:03 PM
From: Mark Marcellus	Read Replies (1) \| Respond to of 78594

I'm also willing to bet that dividends would end up counting towards the AMT amount, which would make the exclusion worthless for many of people affected.

To: James Clarke who wrote (16095)	1/7/2003 7:24:09 AM
From: Don Earl	Read Replies (1) \| Respond to of 78594

James, <<<A dividend tax exemption at the CORPORATE level - now that would change things and change behavior and valuations, but would smell very different politically.>>> I agree, although I have some trouble figuring out what impact, if any, it would have on the economy. Generally, the pattern I notice is those companies that pay the most dividends always seem to be those with the largest insider ownership in the stock. Eliminating taxes at the corporate level might give a company some cushion to increase dividends, but I don't see much of a boost for capital spending. Most of the more capital intensive businesses don't pay much in the way of dividends anyhow, and as you pointed out, the REITs are already exempt. At the individual level, there isn't any benefit to the average consumer to speak of, and even if there were, there would be no effect before a year from April at best. It would be a huge boon to the top richest 5% of the population while putting the burden of making up the deficit on the other 95%. Since the whole concept is basically sense free, and IMO has a low probability of being signed into law, it's hard for me to view as anything other than a political maneuver at a time when the media focus has been on troop movements to the Middle East. The snipe hunt for the mystery bomb will end as snipe hunts usually do, and there will still be a war. In the mean time, the real threat is in Asia and I find it interesting to note there doesn't seem to be as much name calling when there really are weapons of mass destruction involved. An atomic bomb over Tokyo probably won't do much for stock prices even with a tax cut. Although combined with a war in Iraq, $3 a gallon gas isn't out of the question.