Linkmeister

Shibai, crap and nonsense

As expected, Bush has proposed a $674B economic plan; no surprise there. It benefits his wealthy friends; no surprise there either. One of the things he said that is flat-out misleading: 50% of Americans hold stock, therefore they'll all benefit from dividend tax elimination. Guess what, George? The vast majority of American investors hold their stocks in tax-deferred plans like IRAs and 401(k) plans, so those dividends aren't taxed to the individual in the first place. In the second place, the number of companies paying dividends has dropped dramatically over the past 20 years, as more companies (particularly high-tech ones) have opted to keep their cash and reinvest it in the companies. "In the mid 1970s, one-third of the companies that went public paid a dividend, according to finance professors Eugene Fama and Kenneth French.[Dividend computer file] By 1999, only 3.7 percent of the new publicly traded companies paid a dividend." Even companies who've been around for quite a while don't always pay dividends; according to a Business Week story from Oct. 10, 2002 only 350 of the 500 companies in the S&P500 do so. Bush's plan was written by and for political reasons, not for economic ones. He gets to look like he's a common-sense man, eliminating double taxation on dividends, while ignoring the fact that every dime you and I spend at Target or Tiffany is subject to double taxation, assuming you live somewhere that charges a sales tax.

For something entirely different, we've got lawyers with blogs, pundits with blogs, and moms and dads with blogs; now there's a plastic surgeon with a blog. Clever, I calls it.