Replies to post #53224 on Zeev's Turnips Patch-No Politics (ZEEV)

[EMDB426]

Zeev:

What do you think the impact on companies that do not pay dividends would b if the tax is eliminated ? Could you possibly see a scenario where the tax law change would be the option of an exemption of say $1000 of dividends or capital gains.

Thank you.

Margaret

[Rick Faurot]

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[jdaasoc]

Zeev:
Rise in state taxes is already here. I was sent a letter from Dept of Labor that I was potentially liable for $2,300 in UI taxes for an employee who worked 10 weeks abd earned $10K. He had to quit to care for a sick child and his employment history for the last 18 months is empty except for his stint with me. It works out for me as a $5 plus per hour new state tax on his earnings.

I also bailed on about a total of 1/3 of my tax free bonds which appreciated 10% in last 2 years. I don't think the next 2 years will be as kind to bond holdings.

[mlsoft]

Zeev...

I agree with your take on eliminating taxation of dividends and unintended consequences. This has gained a bunch of momentum without much though being put behind it. What about the effect on bonds, especially tax free muni's??

In addition to those problems you point out, how is it going to be so good for the markets when many companies cannot afford to pay a dividend. In the tech area almost none could pay one unless they declared a "pro-forma" dividend - you get a piece of paper to hang on your wall, but it is worthless and non-negotiable.

mlsoft

[sylvester80]

It's interesting that they are talking about the elimination of taxation on dividends. The majority of companies are no longer paying any dividends or they have dramatically cut back their dividends. And the vast majority of techs are not even in dividend game.

So I have no idea how the elimination of taxation on dividends will grow our economy. The only growth that I see is further growth on the deficit.

JMHO.