Tuesday, January 07, 2003

Help me again try to support a tax cut that predominantly gives money back to the wealthy who will only dabble in the market with it and NOT create jobs or invest in their businesses like they have NOT done in the past 2 years..

Dividends reported on tax returns breakdowns like this ( I don't know why the 200,000 - 1,000,000 figure is missing, but you can see the obvious trend)

under $50,000 (15.2 Million returns, $26.9 billion)

50 - 100,000, (10 million, $27.1 billion)

100-200,000 (4.8 million, 23.8 Billion)

Over 1,000,000 (200,000 filers, 25.4 Billion)

So what will this do, certainly not stimulate purchases and the economy. In Fact, this could seriously damage the banking industry and effect long term loan rates and the ability for small and medium sized business to obtain money. The money supply will, in effect, tighten as middle class investors pull their money out of banks to invest in the volatile stock market. Investment in the stock market does NOT do anything for the economy. Putting money in the hands of those that will spend it stimulates economy.

The quicker and broader stimulus offered by the Democrats is at least an attempt to put the money in the right hands. I dissagree, however, with putting money into the hands of those who never put anything in. That is the other extreme, and is just as rediculous as giving money back to those who don't miss it.

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