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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: greenspirit who wrote (340019)	1/8/2003 3:45:03 AM
From: greenspirit	Respond to of 769667

Compute your dividend savings if double taxation is ended. Requires Flash 6. heritage.org A recent study, "Equity Ownership in America, 2002" shows that as of January 2002, about 52.7 million U.S. households (representing about half of U.S. households overall) invest in the stock market - through mutual funds, employer-sponsored plans and individual stocks. That's 84.3 million individual investors. If you currently receive dividends, you are receiving less than you should have because of corporate taxes. Not only are dividends taxed on your personal tax return, but they are also taxed before you received them on corporate tax returns - meaning a smaller amount was left to pay to you. This calculator allows you to see how much you would have received in the absence of those corporate taxes. While it's tricky to pin down the "average" American, we have a rough idea and can show what double taxation of dividends means. For example, the typical single taxpayer, who has a median wage and salary income of approximately $26,000, receives dividend income of about $260. Since these dividends were already taxed once, this means that the typical single American would have had about $100 more in dividends had they not already been taxed at the corporate level. These numbers are more pronounced for the average family. For instance, the typical married couple filing a joint tax return has a median wage and salary income of about $62,000, and has dividend income of approximately $350. So, the typical American married couple would have had nearly $140 more had their dividends not already been taxed at the corporate level. Naturally, if you normally receive a higher amount of dividends than is reflected in these examples, you are missing out on an even larger dollar amount. Simply enter your marginal tax rate and the amount of dividends you received to see how much more money you would have without the double taxation of dividends. Disclaimer: This calculator is not based on any pending legislation, it merely adds back the layer of corporate taxes, estimated at the marginal rate of 35 percent, to your dividends. These data are based on the 1998 SOI file from the Internal Revenue Service of the U.S. Treasury, the latest data available. The wage and salary data do not account for either 401(k) contributions or payroll taxes, and dividend income includes some interest from mutual funds.

To: greenspirit who wrote (340019)	1/8/2003 4:04:06 AM
From: DuckTapeSunroof	Respond to of 769667

Re: "This economic neutrality could be achieved in a number of ways.[2] For example, corporations could be allowed to deduct dividend payments from their taxes (just as they do with interest payments)" >>> That would have been the ideal way to eliminate the double taxation. >>> Too bad Bush didn't choose to do it... and instead went with his weak and conflicted method. >>> Under the wrong-headed Bush proposal: >>> The tax code incentive encouraging corporate debt remains unbalanced (interest on debt is tax deductible, but dividend payments are not.) This encourages debt, as opposed to internally generated earnings, and heightens bankrupcy risks. >>> Corps have only a little more incentive to pay dividends, since they are not deductible. >>> Corps which traditionally played the stock watering game by relying upon stock options for significant portions of their compensation payments... will still do so as long as accountings regs are not reformed to require the expensing of stock options... the companies get a tax write-off for their stock option grants, but no deduction for dividend payments. >>> They get a deduction for debt interest payments, they get a deduction for options grants (and don't have to declare them as an expense against earnings!), but dividend payouts to the stockholders are not deductible. >>> Dividends paid into retirement accounts will still be taxed when they come out. >>> Muni bonds and REITs will take a hit (since they are still taxable), and federal bonds, and interest rates on all must rise to compete with dividend paying tax-free stocks. >>> Far better for Bush to have taken the rational approach and made dividend payouts deductible for the corporations - thus equal to the interest deduction in the eyes of the federal code... leveling the playing field with debt. If that hit federal revenue too hard, he could have removed corporate loopholes from the code. Corporations across the board would have raised dividend payouts, stocks would strongly rebound, retirement plans would not be disadvantaged, and economic incentives for earnings-led growth would have been much better. >>> A wasted opportunity, and all for flimsy political calculations: he thought that because of the recent corporate scandals he couldn't be seen doing them any 'favors'. >>> Short-sighted. Wasted opportunity. All Rove sees is politics... not economics.