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We now know why President Bush was 'C' student
Jan. 9, 2003
Perhaps now we're finding out why President Bush was a "C" student: He can't distinguish economic meaningful investment from receiving a dividend for owning a share of stock.
In basic principles of economics courses, students learn what investment is. Stock ownership usually signifies owning an existing asset, not something new.
Investment means building new facilities or installing equipment. Stocks can be, but rarely are, the source of this funding. For economic stimulus we want to help make investment happen sooner than it might happen otherwise.
Therefore, a tax break on investment this year makes sense as it makes it more profitable in an economy struggling to recover.
The Bush proposal has no effect on those of us owning stock through our retirement plans. While the rich folks who own most shares of stocks that pay dividends may like paying less in taxes, it doesn't change incentives for companies to invest.
Better to drop the dividend tax cut and increase aid to the states to much more than Bush's proposed $10 billion.
Unlike the federal government, Arizona must balance its budget, and Arizona's share of the $10 billion is only $200 million, hardly putting a dent in our expected $1 billion deficit.
Left unchanged, the Bush proposal will transfer income to the wealthy from those who will be hit by state budget cuts. - Dave Wells
Tempe
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