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To: Lizzie Tudor who wrote (157511)	5/29/2003 9:35:53 PM
From: Victor Lazlo	Respond to of 164684

<<tax advantaged investments like 401Ks where dividends are tax free. >> tax-deferred, not tax free.

To: Lizzie Tudor who wrote (157511)	5/29/2003 11:15:57 PM
From: Oeconomicus	Respond to of 164684

Thats why so many investment advisors (including mine) recommend only dividend paying and fixed income investments in my IRA/401K. Liz, your advisor tells you to do that because outside of such a sheltered plan dividend-paying companies are doubly penalized relative to those producing capital gains. Fixed income investments are also more heavily taxes, just not doubly so. He or she wisely advises you to keep the highly taxed assets in a sheltered account and the less taxed, capital gain oriented ones in taxable accounts. It's all part of "tax efficient investing" and it reflects a bias in the tax code AGAINST dividend paying stocks, not in favor of them. If you really believe, as you say, that "The govt shouldn't favor one type over another...", then you should favor the elimination of the double taxation of dividends.