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

To: DMaA who wrote (399694)	4/27/2003 2:21:40 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 769670

well, my feeling is Bush's tax plan, and especially the dividend tax cut was intended to buoy the stock market primarily, I do think this bear mkt has really stunted growth for a number of reasons- loss of personal wealth, pessimism and also all this corporate fraud especially in tech has caused CFOs to tighten the spending until things settle down. So it was ok with me to package a tax plan around the mkts. Problem is, the mkts are reacting to more than just overtaxation of dividends- there is the whole corporate governance issue and the overpay of executives which borders on stock options reform, and the geopolitical tensions that Bush either creates or escalates. I know 911 was terrible but my feeling is terrorism can not bring down the US economy- the US president and his reaction to terrorism CAN. Anyway a dividend tax cut won't necessarily buoy the mkts unless the other stuff gets resolved. The end to the iraq war seems to have helped and also (even more important imo) this flexing of the muscles by the pension funds to get this executive mess under control. So our mkt looks good to me rignt now. Especially the internet companies, seeing strength in those is the best thing technology could hope for, it means end demand is there. So overall, I am not in favor of the Bush tax plan, now. I think its aim was good at the time, but the mkts have larger problems and they might fix themselves. What Bush needs to do is figure out how to cut spending because even with a good mkt, the tax rolls aren't going to be what they used to be (people have millions in cap losses out there). Additionally, cuts in dividends really favor an older, more safety-sensitive invesmtment pool. These people won't necessarily spend their gains. Bush should have cut taxes on GROWTH companies, thats where the jobs are. But growth companies get a net negative from this plan because capital is redirected towards slow growth dividend payers.