No. of Recommendations: 4
wow -- they're finally calling a spade a spade!
this is an excerpt from article by smartmoney [with link at end]:

"Under Bush's plan, dividends paid by a company from its taxed profits wouldn't be taxable by shareholders when received. But on top of that, a company's taxed profits that are not paid out could be declared a "deemed dividend." When the shareholder sells his stock someday, he can exclude all the "deemed dividends" declared while he held the stock from any amount on which he would otherwise have to pay capital-gains tax.

So it's not technically a cut in the capital-gains tax rate. But it is a mechanism that will allow investors to shield part of their capital-gains from any taxation at all. In my view, a rose by any other name will provide just as much stimulus.

In fact, Bush's transformation of dividend tax relief into a virtual capital-gains tax cut transforms a lousy stimulus plan into a great one."
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