A BOSTON GLOBE EDITORIAL - Fairness in taxing

The Boston Globe ^ | December 30, 2002 | staff editorial

[Cincinatus' Wife]

THE BUSH administration is thinking of reducing or eliminating the tax on dividends, a reasonable idea were it not part of a drive to shift federal taxation away from wealthy Americans. Proponents of the idea are right that the the economy needs a boost, but that is no reason to cut taxes in ways that slight the needs of average Americans.

[Calvin Locke]

Not sure if you know it, but the NYT bought the Boston Globe in the go-go '90s.

Not that there was any noticable difference between the two, editorial-wise, anyway.

[Kozak]

It's hard to cut taxes on people WHO DON'T PAY ANY.
Increasingly a smaller and smaller percentage pay a greater and greater share of the taxes.

[Cincinatus' Wife]

It's hard to cut taxes on people WHO DON'T PAY ANY.

That's why they're touting .....If Bush wants to help his reelection prospects and give a solid boost to the economy, he ought to heed the Business Roundtable's proposal for a one-year cut in the Social Security payroll tax, which is a disproportionate burden on low-income people. At a cost of $140 billion, the Roundtable's plan would provide $620 to almost every wage earner. This cut should be accompanied by a $140 billion contribution from the Treasury into the Social Security trust fund to protect its solvency. The payroll tax cut could be paired with elimination of the dividend tax, also recommended by the Roundtable.

[Leisler]

Don't employees own chunks of Southwest, United Airlines, etc? Wouldn't employee owned, part or whole, companies benifit?

[TakeitBack]

The Boston Globe is no more than a newsletter for the DNC.

[Brookhaven]

A majority of Americans do not own stocks,

Yes they do, but it is located in their retirement accounts, college funds, or other mutual fund.

[TakeitBack]

"the top 1 percent of earners...pay nearly half of all dividend taxes..."

Stop right there! If the Libs want to argue inequality, they need to begin with that statement.

Their definition of "rich" are those who earn $50K or more. They want to (somehow) bring tax cuts to those who don't pay taxes at all - to those on the dole.

Same 'ol shite from these people - all blather and nothing like facts or common sense to back it up. All smoke 'n Mirrors. All propaganda.

[Chancellor Palpatine]

Dividends? Some American corporations pay dividends?

Seriously, this may be just the tool to straighten out values in the stock market. This would be a great use of tax policy to fix a very real problem with overvaluation of losers. Imagine - having the highest priced stocks being the ones which pay the most dividends, as opposed to losers which never pay out anything.

Companies would actually try to pay out more as opposed to hanging onto money in bloated budgets.

[Alberta's Child]

Good point, but dividends paid within 401(k) or IRA accounts are tax-exempt anyway.

The best case for eliminating the levy on dividends is that company profits should not be taxed twice, as they are now . . .

This editorial completely misses the point. The best case for eliminating the tax on dividends is that doing so will encourage companies to actually pay these dvidends instead of paying zero dividends and reporting nebulous "earnings" (whatever the heck "earnings" are).

[taxcontrol]

I think reducing the tax is the right idea but they are using the wrong reasoning.

If the justification is that the earnings are taxed twice there are two possible solutions. The first would be to not tax the income earned with dividends. The second, would be to allow corporations to deduct dividends paid out as an expense and thus not tax them at the corporate level.

Personally, I think the second option would improve corp fiscal responsibility by returning to a time when investors expected a RETURN on thier investment - not just the hope of selling their stocks at a higher price.

[theDentist]

Further proof that the Globe should only be used to housebreak puppies or line canary cages.

[Agamemnon]

Cut tax rates -- particularly Cap Gains -- and the Gov't will be drowning in surplus.

Seems you are letting youself get bit by the class warfare bug. Either that or you do not fully understand or recognize the dynamic scoring presented by the most recent Cap Gains windfalls as measured by increased tax receipts to the gov't following the cuts of 1983 and 1997.

[freeper12]

>>Cut tax rates -- particularly Cap Gains -- and the Gov't will be drowning in surplus.

Then by extension, if we reduce all tax rates to zero, the government should get a HUGE windfall of tax revenue...or would it??

But seriously, if you read my previous posts, my point was that the democrats WILL use the issue as a class warfare thing...and my guess is it will stick this time.

I personally would like to see the republicans stick around long enough (i.e. past the 2004 election) to do some real good for the country...like stacking the federal and supreme courts with conservatives....sure they can ram thru a tax-cut that (according to democrats) only benefits the rich, but I'd rather forgoe the extra dough in my pocket right now so that lasting changes can be made that in the long run are more important for the country.

[Agamemnon]

Then by extension, if we reduce all tax rates to zero, the government should get a HUGE windfall of tax revenue...or would it??

Actually, in the context of Capital Gains you are correct (that is what we were talking about, as I recall), but it is doubtful that we could get such a thing in this current climate.

But seriously, if you read my previous posts, my point was that the democrats WILL use the issue as a class warfare thing...and my guess is it will stick this time.

It didn't stick in the previous lowerings of cap gains tax rates, in spite of a flurry of media-led leftist demogoguery. The climate has shifted in the tax debate toward the increasing pool of stock holders which now exist among the common people, not just the elites. All that class warfare stuff just doesn't play like it used to in the '30's.

... but I'd rather forgoe the extra dough in my pocket right now so that lasting changes can be made that in the long run are more important for the country.

You need to think more agressively, and pro-actively. We finally won decisively in November and you are still too comfortable just playing defense. The year 2002 was the political solidification year, affirming the victory of 2000. The year 2004 will be icing on the cake like Reagan's '84 win-amid-booming prosperity, but this time we don't have to try to get a Republican tax cut plan through a Democrat controlled Ways and Means Committee just waiting to stall it and mangle it.

Actually, if I were Bush, I would propose a scrapping of every income tax bill implemented since 1990 and re-institute the Gramm Rudman Act rates (15%/28%)eventually bringing it to one lower ~15% flat rate, and zero the Cap Gains/Inheritance/marriage penalty taxes. Alternatively, kill the entire IRC, repeal 16th Amendment, and implement the Nat'l Retail Sales Tax. Throw a bunch of lawyers and tax accountants out of work and who will really mourn?

Do this and GWB won't just be re-elected, together with Repub super majorities. He'll likely be crowned King, and the Repubs will be in the drivers' seat for the next 50 years.

[speekinout]

inheritance tax (which only affects people with mult-million dollar estates)

You are so wrong about that. The inheritance tax is most cruel to family farmers or other family businesses like small shops and restaurants. It could be that the value of the land or business is over a million, but the heirs have no way of raising that amount to pay taxes.

Small business has always been the life-blood of our economy (about 85% work for small businesses) and this tax is draining that.

[Kozak]

inheritance tax (which only affects people with mult-million dollar estates)

And if through my hard work and effort, I manage to accumulate that amount of money AFTER paying taxes my whole life, whats WRONG with my passing that inheritance on to my children?

[speekinout]

And if through my hard work and effort, I manage to accumulate that amount of money AFTER paying taxes my whole life, whats WRONG with my passing that inheritance on to my children?

Nothing is wrong with that, of course. But most of the people who are hit hard by this tax do not have multi-millions.
This tax affects far more middle class people than the Libs will ever admit.