A majority of likely voters believe the tax plan being touted by Democratic presidential candidate Barack Obama would leave them worse off than they are now, according to a new poll.
The ATI-News/Zogby poll revealed today 52 percent of those surveyed believe Obama's tax scheme would leave them worse off, including 52 percent of independents and 51 percent of women.
"Surprisingly, 18 percent of Obama's own supporters said his tax plan would make them worse off," the poll results said.
One in four Democrats believes Obama's tax agenda would be damaging personally and one in five self-described liberals takes the same position, the poll showed.
Brad O'Leary, president of ATI-News.com and author of "The Audacity of Deceit: Barack Obama's War on American Values," said Obama's plan to raise taxes on businesses and the wealthy – two of the major forces that drive the American economy, "could cost him the election."
The plan, O'Leary said, "Is a loser with almost every key voter bloc."
The poll surveyed 1,008 likely voters nationwide and was conducted September 11-13. It has a margin of error of plus-or-minus 3.1 percentage points.
O'Leary said the poll was run to confirm the conclusions drawn in a chapter from "The Audacity of Deceit, called Obama's "War on Success." The book has enjoyed a meteoric rise in the Amazon.com rankings since its release September 9.
The poll asked likely voters: "Do you think that Barack Obama's plan to increase taxes on businesses and the wealthy will make you better or worse off?"
The results revealed a majority of voters in all regions of the country felt they would be worse off as opposed to better off, especially the swing-state rich central region (53 percent). Even 52 percent of young voters aged 18-29, a key voter group for Obama, feel they'd be worse off, the results showed.
A majority in every income group also felt they'd be worse off under Obama's tax plan, including a majority of those Americans making less than $25,000 per year, it showed.
"This poll clearly shows that a majority of voters, including independents, women and lower-income Americans, think that if Obama's tax plan is put into effect it will cause them personal economic pain," said O'Leary.
The poll also asked, "If Barack Obama is elected president and follows through on his plan to raise taxes on businesses and the wealthy, what do you think businesses will most likely do?"
Seventy-eight percent of American voters said Obama's tax hikes would be passed directly to consumers through price increases, layoffs and/or reduced wages. Only 13 percent had faith that businesses would pay the cost of Obama's tax increases out of their own pockets.
Even 64 percent of Obama's own supporters said his plan to raise taxes on businesses will either result in increased prices for goods, reduced pay for employees, and employee layoffs, as do 76 percent of Democrats and 78 percent of women.
"Even those who plan to vote for Obama think that average Americans, not the wealthy, would suffer under his tax plan," said O'Leary. "Even lower-income Americans, who are the supposed beneficiaries under the Obama tax plan, reject the plan because they know that tax increases on businesses will be passed on to them in the form of higher prices on the goods they need, lower wages, fewer jobs and layoffs."
The results of the poll questions, along with the results of questions on other issues, are available on the www.BarackObamaTest.com website.
There's no doubt that many people are unaware that Obama's tax plan would actually provide tax relief to anyone making less that $250,000/year. If you make more than $250,000/year working for a living your taxes will go up.
He would raise the dividend tax to 20% from 15%, which is of no consequence to working Americans who do not derive the majority of their income from stock dividends.
John McCain might want to explain how eliminating $18 billion dollars in earmarks is going to pay for the income tax cuts and corporate tax cuts he is proposing in an economic downturn.
It amazing to me how much the average working American identifies with tax policy intended to benefit people who are not average working Americans.
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 16:10 Post subject:
sagascend wrote:
There's no doubt that many people are unaware that Obama's tax plan would actually provide tax relief to anyone making less that $250,000/year. If you make more than $250,000/year working for a living your taxes will go up.
And if your taxes go up, your investments go down. Simple economics. I'd rather people invest their money in institutions other than the government.
sagascend wrote:
He would raise the dividend tax to 20% from 15%, which is of no consequence to working Americans who do not derive the majority of their income from stock dividends.
It has a consequence to the people who drive the economy by providing jobs and meeting payrolls. Also the millions of working people who do own stocks though employee purchasing programs. Why should these people take a hit when they sell stocks or cash dividends to pay for college, heating oil, or property taxes?
sagascend wrote:
John McCain might want to explain how eliminating $18 billion dollars in earmarks is going to pay for the income tax cuts and corporate tax cuts he is proposing in an economic downturn.
Obama needs to explain how raising taxes period, will help in an economic downturn. Most understand that in an economic downturn, the last thing you want to do is raise taxes on anyone.
sagascend wrote:
It amazing to me how much the average working American identifies with tax policy intended to benefit people who are not average working Americans.
Because the average American is smarter than some people give them credit for.
I think this was stated accurately:
Quote:
"Even lower-income Americans, who are the supposed beneficiaries under the Obama tax plan, reject the plan because they know that tax increases on businesses will be passed on to them in the form of higher prices on the goods they need, lower wages, fewer jobs and layoffs.
Government doesn't provide most of the jobs, people with capital do. The less money they have to invest because of government confiscation, the less jobs there will be for working Americans, for the most part. I know there's the issue of global outsourcing, but that's another topic.
And if your taxes go up, your investments go down. Simple economics. I'd rather people invest their money in institutions other than the government.
No, this is false. If you make less than $250,000 your tax rates will not go up under Obama's plan. This has zero effect on actual investments, which are not in "government institutions" unless one chooses to stop investing in equities or commodities and start investing government bonds. My investments "go down" if the market for them does.
DChapman wrote:
It has a consequence to the people who drive the economy by providing jobs and meeting payrolls.
You're assuming that the dividend tax impacts jobs and payroll. It impacts investors who rely upon dividends for income and companies who decide to issue dividend or not.
Also the millions of working people who do own stocks though employee purchasing programs. Why should these people take a hit when they sell stocks or cash dividends to pay for college, heating oil, or property taxes?
ESPPs (Employee Stock Purchase Plans) are not subject to a dividend tax until the stock they have purchased pays dividends. In addition, since many ESPPs offer discounted prices to employees the profit they make is built in, regardless of taxes. You are talking about capital gains tax, which would also not be increased for people making less than $250,000/yr.
Furthermore, the hikes for folks above that threshhold would return to the levels that they were under President Reagan.
Unless you are an independently wealthy person who relies upon divends or the sale of stock for income, the Obama tax plan works for you. This includes most working Americans who save in 401Ks, pay for college and maintain a household. I haven't even touched all of the tax credits, two or which are for college tuition and utilities costs specifically.
DChapman wrote:
Obama needs to explain how rasing taxes period, will help in an economic downturn.
The goverment needs revenue if operating costs go up. John McCain knows this, as did George Bush Sr. This war we have been fighting for the past 5 years is not going to pay for itself. These bailouts we are springing for, however, might.
Quote:
Because the average American is smarter than some people give them credit for.
No, not if they aren't interested in the facts and educating themselves.
DChapman wrote:
Governement doesn't provide most of the jobs, people with capital do. The less money they have to invest because of governement confiscation, the less jobs there will be for working Americans, for the most part. I know there's the issue of global outsourcing, but that's another topic.
There are many factors that go into stimulating growth in the economy, in how and when capital is invested by small businesses up to multinational corporations. Taxes and regulation inhibit growth in some ways and stimulate it in others. Globalization has a HUGE impact on where capital is invested, and it can't be ignored in a discussion about what kinds of economic and tax policy result in growth in the U.S. If the flow of capital towards China and other emerging markets as well as the increase in cross-national and multinational ownership is any indication of what's to come, it is very short-sighted to insist that keeping taxes low is the answer to stimulating the American economy to grow (and therefore, creating jobs and income for working people).
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 17:16 Post subject:
Quote:
No, this is false. If you make less than $250,000 your tax rates will not go up under Obama's plan. This has zero effect on actual investments, which are not in "government institutions" unless one chooses to stop investing in equities or commodities and start investing government bonds. My investments "go down" if the market for them does.
I was referring to people who earn more than the 250K. If they are forced to any more to the government, then they will most likely invest less in their business or other commdities.
sagascend wrote:
You're assuming that the dividend tax impacts jobs and payroll. It impacts investors who rely upon dividends for income and companies who decide to issue dividend or not.
Precisely. It would affect someone like me as well. I am hardly rich.
sagascend wrote:
ESPPs (Employee Stock Purchase Plans) are not subject to a dividend tax until the stock they have purchased pays dividends. In addition, since many ESPPs offer discounted prices to employees the profit they make is built in, regardless of taxes. You are talking about capital gains tax, which would also not be increased for people making less than $250,000/yr.
Yes, I was referring to the capital gains tax. So again, if you increase the capital gains tax for people who earn more than 250K, then the movement of stocks will decrease.
sagascend wrote:
The goverment needs revenue if operating costs go up.
So do the people which the government gets its money from. Then the said government needs to do what businesses and people do, cut expenses.
sagascend wrote:
Taxes and regulation inhibit growth in some ways and stimulate it in others.
Increasing taxes and regulation stimulate growth???
sagascend wrote:
Globalization has a HUGE impact on where capital is invested, and it can't be ignored in a discussion about what kinds of economic and tax policy result in growth in the U.S. If the flow of capital towards China and other emerging markets as well as the increase in cross-national and multinational ownership is any indication of what's to come, it is very short-sighted to insist that keeping taxes low is the answer to stimulating the American economy to grow (and therefore, creating jobs and income for working people).
Capital investments are like electricity. Electricity will flow in the path of least resistence. Capital inevestments are the same. Go ahead and increase taxes and regulation, and watch the continued flow of capital investments to overseas markets whom have less taxes and regulations.
You're assuming that the dividend tax impacts jobs and payroll. It impacts investors who rely upon dividends for income and companies who decide to issue dividend or not.
I beg to differ. This is a digression, but it is not that simple. Every company needs capital. Because the U.S. tax on corporate profits (dividends), penalizes equity capitalization (stocks) and rewards debt capitalization (bonds), U.S. stocks are devalued relative to bonds, compared to other countries (Japan, Singapore, China, or the EU). In every case, those who provide capital will seek the best bang for their buck. Increasing the U.S. tax on corporate profits will simply push U.S. stock prices lower and U.S. bond prices higher. Whether this is "good" or "bad" in some sense, I cannot say.
I was referring to people who earn more than the 250K. If they are forced to any more to the government, then they will most likely invest less in their business or other commdities.
You're conflating income with business ownership and income taxes with taxes on businesses/corporations. Most Americans who work for a living, do not rely upon dividend income to live, and do not own a corporation will make out better if they make less than $250K.
Raising capital for a business is another matter. Don't some of the taxes we all pay go to helping small business owners secure government-backed loans and grants to fund their businesses? This is presented as an "either or" proposition but it isn't.
Quote:
Precisely. It would affect someone like me as well. I am hardly rich.
How so? Do you live off of investment income or do you have a job?
Quote:
Yes, I was referring to the capital gains tax. So again, if you increase the capital gains tax for people who earn more than 250K, then the movement of stocks will decrease.
How so?
Quote:
So do the people which the government gets its money from. Then the said government needs to do what businesses and people do, cut expenses.
But that is not what John McCain will do. The war is costing billions a month and he is talking about cutting $18 billion in earmarks, which will result in some job losses at the state level by the way. Lots of earmarks go towards infrastructure projects in the states, and those require labor. I fail to see how either one of them will pay for these campaign promises, but at least Obama has attempted to pay for his by raising some taxes.
Quote:
Increasing taxes and regulation stimulate growth???
It is all in how the government manages and allocates the revenue it receives. Investments in infrastructure come from...taxes. Regulation can provide transparency to investors and encourage an even competitive playing field in the market. You have to look at the effects a particular course of action will produce rather than judge it on the surface because it is "raising taxes" or "increasing regulation." And the fact is that economic effects are never simple or one-dimensional at this level.
Quote:
Capital investments are like electricity. Electricity will flow in the path of least resistence. Capital inevestments are the same. Go ahead and increase taxes and regulation, and watch the continued flow of capital investments to overseas markets whom have less taxes and regulations.
China has less taxes and regulation? Dubai? Scandinavia? Or is the capital investment flow a matter of what their governments are focusing on and encouraging through their economic policy and investments?
How many U.S. jobs have gone overseas in the last 8 years? Yet, taxes were lowered.
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 18:07 Post subject:
Quote:
‘ Tax cuts for the rich!’ http://www.NewsAndOpinion.com | With the election season coming into the home stretch, the cry of "Tax cuts for the rich!" is ringing out across the land from Democrats desperate to regain power in Washington. Like many other political slogans, its popularity depends on slippery words and sloppy thinking.
First of all, just what does "rich" mean? And does it have any relevance to the kinds of tax cuts at issue?
The recent release of some of Teresa Heinz Kerry's tax records reveals as much about the confusion over this issue as it does about her financial situation. The Kerrys are clearly rich, with several homes, a private jet, and millions of dollars in annual income. Yet they paid just 13 percent of their income in taxes.
That's less than most American pay — and it is not due to "tax cuts for the rich." It is due to putting much of their wealth into tax-free municipal bonds or other tax-exempt securities. So whether income tax rates are high or low, on rich or poor, makes little difference to them.
One of the major purposes of tax cuts is to get people to take their money out of tax-free securities and invest that money in something that will increase economic activity and create jobs. Since our income tax system is steeply graduated, any across-the-board tax cut will immediately benefit most those who pay most of the taxes — which is to say, people with higher incomes.
After Ronald Reagan's tax rate cuts in the 1980s first brought out anguished cries of "tax cuts for the rich," it turned out that the federal government collected more tax revenue than ever and that people in upper income brackets not only paid a larger amount of taxes than before, but even paid a higher share of all taxes than before.
How could this be?
This takes us back to slippery words and sloppy thinking. What was cut were tax rates. What went up were tax revenues. At lower tax rates, it paid to take money out of tax shelters and put it somewhere where it was more productive, both for the individual investor and for the economy as a whole.
As the economy expanded and incomes and employment rose, tax revenues rose, despite lower rates being charged for a given income. The incomes of people in the higher brackets went up especially sharply, so the total taxes they paid also went up especially sharply — again, despite lower tax rates.
Much sloppy thinking about economic issues is based on reasoning as if there is a fixed amount of income, so that someone has to lose whenever someone else gains. The real test of an economic policy is whether it can produce a rising tide that lifts all boats.
Ronald Reagan's policies did that, even while he was being denounced for "tax cuts for the rich."
There is also a lot of sloppy thinking about what "rich" means. Income is not wealth and income taxes do not apply to wealth.
People who have high incomes without much wealth are not rich. If they lose their jobs tomorrow, they are up the creek if they cannot find another job that pays as well. But these are the people who get hit with high income tax rates, often paying far higher rates than genuinely rich people.
High-tax liberals like John Kerry seldom define what they mean by "rich." When they do, it is almost always expressed in terms of income, not wealth.
The income of most Americans varies greatly over the course of their lives. Most of the people who are in the bottom 20 percent at one point are in the top 20 percent in later years.
A family income of $100,000 a year does not make you rich. A couple earning $50,000 each probably did not start out making $50,000 each. People usually work up to their peak income after many years of effort and struggle — and they may not be that far from retirement time, when they will have to give up that income and live on their savings and pensions.
Most Americans are likely to become "rich" — as defined by high-tax liberals — at some point in their lives. So when liberal demagogues start talking about taxing "the rich," send not to know for whom the bell tolls. It tolls for thee.
Thomas Sowell is a fellow at the Hoover Institution. This article was from 2004.
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 18:11 Post subject:
sagascend wrote:
How so? Do you live off of investment income or do you have a job?
Yes I do have a job (wise crack, IMO, but that's ok!), which is the reason why I am concerned about an Obama economy. When the need arises, I must sell stock. Sometimes as a capital gain, sometimes not. I can tell you, I went from having to pay at the end of the year, to getting back refunds, thanks to capital gains tax cuts according to my accountant. But then, what the hell does my acountant know. What does Thomas Sowell know.....
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 18:29 Post subject:
sagascend wrote:
Can I request that you put the Sowell article in its own thread? The original article is about Obama's tax plan.
The post will remain. The Sowell article articulates positions that will come when tax rates are raised or reduced for the "rich", which is key to the Obama tax plan, in my opinion. I used Sowell's to show what happens when you talk about "tax cuts for the rich". as Biden, Obama's running mate has suggested that those earning more than 250K have a patriotic obligation to pay more taxes. Sowell's article here shows how off base economically Obama's tax plan is. So, IMO, the Sowell article does not take the thread about the Obama tax plan off course.
Last edited by DChapman on Fri 19 Sep 2008 18:34; edited 1 time in total
How so? Do you live off of investment income or do you have a job?
Yes I do have a job (wise crack, IMO, but that's ok!), which is the reason why I am concerned about an Obama economy. When the need arises, I must sell stock. Sometimes as a capital gain, sometimes not. I can tell you, I went from having to pay at the end of the year, to getting back refunds, thanks to capital gains tax cuts according to my accountant. But then, what the hell does my acountant know. What does Thomas Sowell know.....
Um...some people do live off of investment income. These people may not consider themselves wealthy. I don't know your personal situation and you have never mentioned what type of work you do (that I recall) so I thought I would ask.
Anyway, I also invest in stock - quite agressively, through a 401K, ESPP, and Sharebuilder account. My daughter also has a 529. I am a buy and hold investor. But my main source of income, like most Americans who are middle class and below, is my salary. Most Americans are not living off of investment income (edit: Retirees living off of 401k/IRA would be).
I don't know what your accountant knows or why your personal financial situation depends on a decrease in capital gains tax. I don't know what Thomas Sowell's thoughts on what is rich have to do with the fact that most Americans do not make $250K a year, or anywhere near it. I don't know that he recognizes that the awesome productivity gains over the last few years have not resulted in wage gains for hardworking Americans that one would expect. A whole lot of people aren't making more money, no matter how hard they work. Incomes, for many, are not rising.
The simple fact is that people who invest very little, if at all, in equities for the short term (especially outside of their retirement accounts) will benefit from the Obama plan. Even the people with higher incomes will go back to what we had in 1986 - 2001, after a decade of tremendous growth I might add. The gains received, by and large, were not by the very people who the Obama plan are designed to help. Hopefully, Obama can pull out some charts Perot-style and do some re-education.
Last edited by sagascend on Fri 19 Sep 2008 19:13; edited 1 time in total
The income of most Americans varies greatly over the course of their lives. Most of the people who are in the bottom 20 percent at one point are in the top 20 percent in later years.
A family income of $100,000 a year does not make you rich. A couple earning $50,000 each probably did not start out making $50,000 each. People usually work up to their peak income after many years of effort and struggle — and they may not be that far from retirement time, when they will have to give up that income and live on their savings and pensions.
Most Americans are likely to become "rich" — as defined by high-tax liberals — at some point in their lives. So when liberal demagogues start talking about taxing "the rich," send not to know for whom the bell tolls. It tolls for thee.
FC.org wrote:
For simplicity, we'll just focus on the over-$250,000 group. Those reporting adjusted gross income of more than $250,000 to the IRS are projected to make up 2 percent of households next year, when the new president will take office. Those folks will earn 24.1 percent of all income, and pay 43.6 percent of all personal federal income taxes, the Tax Policy Center figures. Under either Obama or Clinton, they might pay even more.
The candidates haven't said exactly how a $250,000 limit would be applied. But often these figures are meant only for couples filing jointly, and the limit is half that for singles filing alone.
Joint returns with more than $250,000 adjusted gross income and single returns with more than $125,000 adjusted gross income together are estimated to make up 3.1 percent of households next year. That group is projected to earn 27 percent of all personal income and pay 47.9 percent of all personal federal income taxes in 2009, according to the TPC's calculations.
Sowell is full on crap on this issue, which is sad. Most Americans ARE NOT rich and WILL NOT be rich. An AGI of $250K is a hell of a lot of money (remember, AGI is not what is on one's W2).
The very fact that the Obama tax plan starts the roll-back to pre-Bush days at $250K AGI says very clearly that the definition of who is "rich" is hardly a family making $100K.
Now, Sowell did not comment on the Obama tax plan specifically in this article, which makes the comparison irrelevant. Still, the article was clearly posted in the spirit of "a liberal is a liberal" not in the spirit of taking a close look at Obama's tax plan.
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 18:57 Post subject:
Quote:
Sowell is full on crap on this issue, which is sad. Most Americans ARE NOT rich and WILL NOT be rich. An AGI of $250K is a hell of a lot of money (remember, AGI is not what is on one's W2).
He did not say that.
Quote:
Most Americans are likely to become "rich" — as defined by high-tax liberals — at some point in their lives.
Granted, this article was written prior to the Obama plan, but the point he was tying to make is that "tax cuts for rich" liberals have an arbitrary process of defining, who is "rich", and how much. That was his point.
I can guarantee that he will opine on Obama's tax plan.
Sowell is full on crap on this issue, which is sad. Most Americans ARE NOT rich and WILL NOT be rich. An AGI of $250K is a hell of a lot of money (remember, AGI is not what is on one's W2).
He did not say that.
Quote:
Most Americans are likely to become "rich" — as defined by high-tax liberals — at some point in their lives.
Granted, this article was written prior to the Obama plan, but the point he was tying to make is that "tax cuts for rich" liberals have an arbitrary process of defing, "rich".
I can guarantee that he will opine on Obama's tax plan.
Uh oh:
Quote:
The income of most Americans varies greatly over the course of their lives. Most of the people who are in the bottom 20 percent at one point are in the top 20 percent in later years.
If Sowell was a poster here I would demand to see some evidence for this. Basically another way to think about what he is saying is that most people end up rich (assuming that bottom 20% = poor and top 20% = rich). This is BS. I'm really disappointed that a scholar like Sowell would stoop so low to throw out some red meat.
Fact: 95% + Americans make $250,000 or less. THIS is most Americans by any rational definition.
Fact: Obama has not defined "rich." BUT if one makes the assumption that something other than "middle class" begins at AGI $250,000, Thomas Sowell is the one making arbitrary and baseless claims.
I fail to see why you would post an article like this for any other reason that to try to shift the conversation away from the original topic. I also would like to see some evidence that Obama has defined "the rich" as anything close to what Sowell yammered about.
If anything what an honest critic could conclude is that Obama thinks people who have an AGI of $250K aren't middle class and don't need an income tax break.
Joined: 27 Nov 2004 {Posts: 1449 } Location: Hudson Valley, NY
Posted: Fri 19 Sep 2008 19:12 Post subject:
sagascend wrote:
I fail to see why you would post an article like this for any other reason that to try to shift the conversation away from the original topic. I also would like to see some evidence that Obama has defined "the rich" as anything close to what Sowell yammered about.
I did not, nor did Sowell imply that Obama has defined "rich" as to what Sowell was discussing. I said that the article came out before the Obama plan.
That was not the key point in the article for me in countering the Obama plan to raise taxes, period.
Quote:
It is due to putting much of their wealth into tax-free municipal bonds or other tax-exempt securities. So whether income tax rates are high or low, on rich or poor, makes little difference to them.
One of the major purposes of tax cuts is to get people to take their money out of tax-free securities and invest that money in something that will increase economic activity and create jobs. Since our income tax system is steeply graduated, any across-the-board tax cut will immediately benefit most those who pay most of the taxes — which is to say, people with higher incomes.
Perhaps I should have just posted excerpts from the article. My bad, I'm not perfect.......
You're assuming that the dividend tax impacts jobs and payroll. It impacts investors who rely upon dividends for income and companies who decide to issue dividend or not.
I beg to differ. This is a digression, but it is not that simple. Every company needs capital. Because the U.S. tax on corporate profits (dividends), penalizes equity capitalization (stocks) and rewards debt capitalization (bonds), U.S. stocks are devalued relative to bonds, compared to other countries (Japan, Singapore, China, or the EU). In every case, those who provide capital will seek the best bang for their buck. Increasing the U.S. tax on corporate profits will simply push U.S. stock prices lower and U.S. bond prices higher. Whether this is "good" or "bad" in some sense, I cannot say.
Without having looked at U.S. stock prices vs. bond rates before and after the '03 dividend tax cuts, how attractive are equity investments that reinvest earnings instead of issuing dividends? Wouldn't it depend on whether investors were seeking shorter-term income or longer term growth?
I think the capital gains tax has to be factored in as well.
Perhaps I should have just posted excerpts from the article.
No worries, but this reads less like a critique and more like a partisan polemic...plus it really is obsolete. I'm sure there are critics of Obama's tax plan specifically that could be referenced.
Without having looked at U.S. stock prices vs. bond rates before and after the '03 dividend tax cuts, how attractive are equity investments that reinvest earnings instead of issuing dividends? Wouldn't it depend on whether investors were seeking shorter-term income or longer term growth?
Regarding pre and post 2003, I am not comparing U.S. stock versus bond prices over time. I am comparing the prices of stock and bonds of U.S. companies versus comparable stocks and bonds overseas. Where dividends are not taxed, shareholders earn more after-tax and so stocks are worth more.
Regarding reinvested dividends, it makes no difference. Corporation profits are still double-taxed in the U.S. The first on earnings when the corporation files its 1120, the second if and when the earnings wind up in shareholders' hands. The only way to avoid the second tax on the same income is to retain the earnings and never distribute them at all. (Theoretically increasing share value.)
Regarding growth (or erosion) in a stock's value, that is one advantage (and risk) of stocks over bonds, but it does not affect an apples-to-apples comparison of U.S. stocks with comparable Japanese stocks or U.S. bonds with Japanese bonds.
Regarding growth (or erosion) in a stock's value, that is one advantage (and risk) of stocks over bonds, but it does not affect an apples-to-apples comparison of U.S. stocks with comparable Japanese stocks or U.S. bonds with Japanese bonds.
Okay. I get what you are saying, but, given that countries can also have one set of tax laws for citizens/domestic corporations and another for foreign investors, doesn't the after-tax value of the stock depend on who bought it as well as the prevailing capital gains tax and dividend laws?
Do differences in dividend taxes in the apples-to-apples comparison mean that a Japanese investor in Toyota keeps more money after the sale of stock than a U.S. investor in Toyota if Japan's capital gains tax and dividend tax are lower? If so, what impact does this have on how many jobs are created in Japan vs. U.S.? Companies can raise capital and grow through equity as well as debt financing.
A 20% dividend tax is also in line with dividend taxes in growing economies like China and India.
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