quarters' worth of gross domestic product growth that was the strongest in almost 20 years, and the creation of 1.1 million jobs over the past eight months." Secretary Snow added that unemployment rate has gone down in 47 of the 50 states over the past year, and household wealth is at an all-time high.
In my opinion, it is possible that the change in tax rates on dividend payments has resulted in pressure on public companies to increase their dividend payments rather than increasing retained earning. It seems likely that this pressure will be ongoing since stockholders no longer have to treat dividends as ordinary income. However, it seems that Mr. Snow is stretching the truth when he suggests that this particular tax cut is a major factor in the economy, responsible for lowering unemployment rates and for a more robust national economy. I was surprised that Mr. Snow would make these statements, and that he would not provide more details in support of his statement. Ideally, one would like to see supporting documentation showing a causal relationship between lower tax rates on dividends and lower unemployment rates, as well as the other linkages Mr. Snow implied were associated with the Jobs and Growth Tax Relief Reconciliation Act of 2003. Please let me know if you have any questions or comments.
Investment News, June 14, 2004 v8 i23
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