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To: Dog Gone
Those dividends are taxed at personal income tax rates. However, that income has been deferred and any earnings on it accrue tax free until withdrawn.

Technically speaking, within the current tax year Pelosi is correct.

92 posted on 01/07/2003 12:02:06 PM PST by muawiyah
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To: muawiyah
Technically speaking, within the current tax year Pelosi is correct.

Unless you take it out early to pay your school taxes. Then you're really screwed. LOL

99 posted on 01/07/2003 12:04:39 PM PST by concerned about politics
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To: muawiyah
Technically speaking, within the current tax year Pelosi is correct.

It depends on the meaning of the word "is."

101 posted on 01/07/2003 12:05:59 PM PST by concerned about politics
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To: muawiyah
...that income has been deferred and any earnings on it accrue tax free until withdrawn...

Well, that's true but since the tax is paid when it is withdrawn one's rate of return is considerably less. Having those dividends be tax free when they are withdrawn increases the attractiveness of 401(k)s and IRAs. That means people will be better able to provide for their retirement, which was one of the objectives stated in W's speech.

Also, if anyone has to withdraw early, the earnings are taxed and there is a heafty penalty to boot!

103 posted on 01/07/2003 12:06:46 PM PST by Wphile
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To: muawiyah
Technically speaking, within the current tax year Pelosi is correct

Only if you're willing to change the definition of words.

Besides, her lie is more sinister than that. The implication is that making dividends tax-free won't have any impact on people with those retirement accounts.

It sure the heck will. There are taxable and non-taxable withdrawals from those accounts, and this would shift dividend payments into the non-taxable category. The impact of that for many retirees will be huge.

115 posted on 01/07/2003 12:14:02 PM PST by Dog Gone
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