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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (70404)	6/5/2003 11:04:04 AM
From: chomolungma	Read Replies (1) \| Respond to of 70976

My fear is that investors will clamor for dividends and pressure companies to distribute their profits rather than invest them in capex. I would prefer a reduction of corporate taxes and/or accelerated depreciation. That would encourage investment. I agree. Furthermore, I believe strongly that corporate income taxes will disappear entirely in the next 20+ years. This will be a natural result of countries competing with each other to attract business. With the global economy making it easy to shift to low-tax countries and multinational companies spread around the world, there will be a contest to reduce taxes. As for dividend tax reduction increasing payouts that reduce available capital, I think that most of this money will be returned in one way or another to the investment pool. If dividends had been excluded from taxes entirely like the first Bush plan, then I think most companies would have paid all earnings out each year and instituted dividend reinvestment plans that took the money right back in the form of new shares - the law of unintended consequences.