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To: J_F_Shepard who wrote (172539)	1/17/2003 9:10:36 PM
From: TimF	Respond to of 186894

OT We've been hearing the tax cut solution so often the last 2 years I now wonder if repub's want to pay any taxes at all. It's a big jump from saying that we should reduce taxes from a point a lot above the historical averages to saying we don't want any taxes at all. Tim

To: J_F_Shepard who wrote (172539)	1/17/2003 9:42:27 PM
From: Robert Salasidis	Respond to of 186894

My understanding is that dividends will be tax free only for US registered companies - ie if the company has a Bermuda registry, and are not paying taxes at all , then their dividends will not be exempt. Income and investment taxes are decreased, overall taxation is decreased. the money is not made up per se, as there has to be an overall decrease in public spending. This can be done slowly over 10-15 years by simply freezing any spending increases to the rate of inflation (then assuming that the economy gains at a rate more rapid than the rate of inflation by 1-2% during that time frame the tax cuts would pay for themselves. In the interim deeper tax cuts even would be possible, making up some of the difference by an increase in consumption taxes (the only worry with consumtion taxes is that they would be here to stay - but some future government would be keen on increasing income taxes on top of them). I would agree this scenario is difficult to implement as it is not something that can be completed in a single, or even two, presidential terms. Reagan did start the ball rolling, and I think this is phase 2. I would think that if one plotted income tax / corporate tax rates vs economic growth over the long term they would have an inverse relationship (several countries come to mind), assuming other factors remain constant. On the subject of war - it is a necessary evil sometimes - and I would think a well planned out affair could actually have lower long term costs than a lack of conflict resolution. I think you can disagree with whether this is a well thought out afair, but not the statement behind it. Therefore the idea is deal with the problem in present, reap the long term benefits of improved stability, peace, and democracy in the future.