An interesting comment regarding limited liability. Are you saying that liability should not be limited, or are you saying it should be limited but they should pay for it?
Also your comment about how Americans get their news. Is it any different in Australia? Bill -- On Mon, 27 Jan 2003 15:36:29 Dr. Bruce R. McFarling wrote: >On Sun, 26 Jan 2003 14:52:50 -0500, >STEPHEN BLOCK <[EMAIL PROTECTED]> wrote: > >>A question: > >>It is assumed that deficits are stimulative. But is it the case >>that they are _inherently_ stimulative, or are they stimulative >>primarily when the deficit is the result of increased government >>spending, and not just because of a reduction in revenue? If they >>are inherently stimulative, can anyone explain how that works? > >Government spending is directly stimulative, because what >they buy necessarily provides effective demand. > >Tax reductions are indirectly stimulative, by increasing >disposable incomes. The additional consumption decision >between the government policy decision and the stimulus >normally implies a weaker stimulus, by the propensity to >consume (share of new income that tends to be spent rather >than saved). If that is a relatively modest increase per >person spread around a lot of people, as with, say, raising >the personal deduction (tax free threshold in Australia), >then it would take a very broad based sentiment in favour >of not spending that disposable income to fall very far >short of the expected impact. > >Of particular concern is that a reduction in taxation >on income on dividend income, since more of that >decision whether to spend or save that income comes >under a relatively small number of people (institutional >investors, wealthy individual investors) making >decisions regarding bigger chunks of money at a time. >If there is a strong tendency to hold the tax cut as >"reinvested" dividends, it might not have a major >stimulus effect. > >Of course, if the political cause of fighting the >dividend income tax cut was lost, it would be >preferable for the corporate tax paid on the >dividend income to come back as franking credits, >rather than dividends to be tax free, since tax >credits retain the principle of progressive income >tax. > >The notion that investors in corporations should >essentially recieve the substantial social benefit of >limited liability for free, which is the essence of >the "no double taxation" argument, is an odious one, >and its a shame that most Americans get their news >from direct beneficiaries of this notion. > _____________________________________________________________ Get 25MB, POP3, Spam Filtering with LYCOS MAIL PLUS for $19.95/year. http://login.mail.lycos.com/brandPage.shtml?pageId=plus&ref=lmtplus ==^================================================================ This email was sent to: archive@mail-archive.com EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^================================================================
