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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (8125)	1/15/2003 4:12:25 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

If the government wants jobs to be created it has stop reducing incentives to profit. Businesses expand their operations with money from profits and invested capital from the equity market. Profits are directly impacted with high corp tax rates, investments are directly impacted with high cap gains taxes. You can't stimulate the economy in a positive way by giving consumers more money to spend on consumption. If you expand the economy consumer spending automatically goes up, but the reverse isn't true because so much of what we consume comes from somewhere else. You grow the economy by allowing people to reap the rewards of risk investment. Whenever you invest in some new venture it is risk money that is used. When the government subjects the profits from that risk money to high taxes it reduces the willingness for individuals or companies to take risks. The dividend exclusion was a poor way to try to do this, a cop out that is neutral on a macro scale although on a micro level it will be good for some individuals like retired and elderly who live off dividend income. Reducing the cap gains tax would have been highly preferable even though it would cost more initially. But imagine the uproar from those same people who think that this tax cut is just a "give away to the rich" and the near bankrupt states if they tried to get rid of cap gains taxes even though it would undoubtedly result in more jobs and economic expansion.