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

To: Don Earl who wrote (16115)	1/9/2003 6:38:08 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 78748

<<It would be a bookkeeping nightmare for private investors and probably at least as bad for fund managers>>The costs to companies and investors of tracking & reporting the info needed to support this would offset the benefits and then some. One would think that this complexity combined with 'tax break for the rich' arguments and a thin republican majority...with even some republicans like McCain opposed, will prevent passage of the dividend tax breaks....which may be why the market's backing away from the dividend rally. Here's a NYT article highlighting the difficulty passing this: "Democrats Who Backed Tax Cut in '01 Balk Now" nytimes.com Excerpt: <<In 2001, President Bush was able to garner enough bipartisan support in the thinly divided Senate to pass his $1.35 trillion tax cut package. This time, however, even the president's Republican supporters predict a tougher road. "There are a number of Democrats who voted with him on the last tax cut, and also a number of Republicans, who are not willing to just accept this one as a fait accompli and take it as it is," Senator John B. Breaux, Democrat of Louisiana, said in an interview, adding that the dividend tax cut would have to be "replaced and/or dramatically scaled down.">> I pass this on because investing based on a false premise, that dividends are likely to not to be taxed, will produce adverse outcomes when the thesis unwinds.