Thursday, May 15, 2003

Buy a Senator
These days, the going rate for a Senator is about $20 billion. That's the amount it took in aid to states, in order to secure a yes vote for dividend tax elimination from Senator Nelson (CO) (NYT). Now, let me be honest, I do not oppose the elimination of the dividend tax as I do consider it double taxation. However, given the precariousness of our federal budget and the red ink spewing forth, this is hardly the time to be making corrections to the tax code that would disproportionatley benefit the wealthy. In addition, the GOP's claim that this would stimulate the economy is clearly erroneous as the most efficient way to stimulate would be to put money in the hands of those who consume a higher percentage of their earnings (ie. lower income folks). Plus, as I have noted on several occasions, there is a cost to the muni market (and taxpayers) from eliminating taxes on dividends.
Oh, and lets not forget that in order to get under the $350 billion cap, the dividend tax comes back in 2007. And if you believe that, I've got some prime swamp land in Florida to sell you.


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