Rep. Cox aims to end double taxation of dividends, restore confidence to markets
WASHINGTON – Investor confidence in corporate responsibility and the public markets has reason to rise because of a piece of legislation introduced by Rep. Chris Cox (R-Calif.). The Investor Protection, Market Stabilization, and Tax Fairness Restoration Act aims, among other things, to end the disparity between capital gains and dividends, and to stabilize the stock market.
Taxpayer advocate Grover Norquist, who heads Americans for Tax Reform in Washington, pointed out that Cox\\\’s legislation "would end the current tax discrimination against dividends, and therefore end the tax code-related distortions of the public markets. This legislation will have enormous appeal to the growing class of investor-voters in the American electorate."
The proposal would remove the confiscatory tax rates currently applied to dividend income, which have resulted in an almost total reliance on capital gains to reward investment. Restoring the feasibility of dividends will benefit investor-voters by placing pressure on corporations to report earnings in a straightforward and direct manner. Because dividends can only be paid out of real earnings, consumers will be able to invest in the stock market with peace of mind. Cox\\\’s plan will benefit not only investors, but also all consumers because of its capability to revitalize the stock market. As a result, consumer confidence will rise.
The House is expected to vote on this important piece of legislation before the November elections. Says Norquist, "Rep. Cox\\\’s bill is a necessary first step to restore investor confidence and reinvigorate the market. The question is, once it passes the House, what will happen in the Senate graveyard?"
Harvard-educated and street-smartened by years as a Washington DC insider, Norquist is your show\\\’s ultimate guest for a tax and investor segment. His bio can be found at http://www.atr.org/staff. You can find more information about his organization Americans for Tax Reform at www.atr.org.