January 07, 2003
Incidence of the Dividend Tax Cut

Distribution Table

The New York Times has a dividend-tax-cut distribution table...

Income Percentile Income Range
(Adjusted Gross Income)
Average Change in Income Tax
0-20 $0-$9,964 -$6
20-40 $9,965-$21,349 -$20
40-60 $21,350-$37,834 -$47
60-80 $37,835-$68,329 -$168
80-90 $68,330-$98,053 -$304
90-95 $98,054-$133,858 -$622
95-99 $133,859-$316,894 -$1,777
99-100 $316,895- -$13,243

Posted by DeLong at January 07, 2003 01:49 PM | Trackback

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Comments

Silly static analysis.

Tax free dividend stocks are a lot more attractive, expecial now that some good names should be getting inro the act, like INTC and DELL. Both of whom are positioning themselves for the next wave (communications).

Nice opportunity for the long term investor and growth imo.

Posted by: Eric on January 7, 2003 02:12 PM

Hey, unemployed single mothers can sure afford to spend an extra $6-$20 bucks on diapers! I mean, if they're wise enough to save on dental care: a box of size 1-2 Huggies cost $29.99 at... Costco.

Posted by: Jean-Philippe Stijns on January 7, 2003 02:21 PM

P.S. By now, I am convinced our Compassionate-Conservatist-in-Chief does indeed have a lot of compassion for... the top percentile of the population! (you know those of us who save most of any marginal increase in their income.)

Posted by: Jean-Philippe Stijns on January 7, 2003 02:34 PM

Hey, Jean-Phillipe, that single mom could think like a long term investor and take that $6-$20, open a margin account, buy maybe 5 shares of INTC, near the bottom of its 52-week range and STILL 45 times earnings, and...and then get a margin call!

Argh. Someone wake me when the reign of Bush the Younger is over.

Posted by: Curtiss Leung on January 7, 2003 03:31 PM

Goody! I get a substantial tax cut. Why do I feel so ungrateful? Oh, I know, because I am one of those despised evil liberals who believes in economic equality.

But seriously, do you think that Bush & Co. are secretly pining for the enormous popularity that the bull market gave to Clinton? How then do you account for their stated intent of propping up the stock market by eliminating the tax on dividends?

If you have short term goals, you have short term solutions. Not to worry, somebody elso will clean up after you.

Posted by: David in NY on January 7, 2003 05:32 PM

Silly NYT. They neglected to calculate the dynamic effects of all the extra INTC and DELL stock that the <$10k or for that matter the less than $25k crowd will be rushing to buy as soon as it comes out. And they also forgot to calculate the gain from that 10% increase in their stock portfolio. Yep, that should sure make the disparities in that table look less dramatic.

Besides, the White House issued all those nice tables summarizing the across income percentile dynamic effects of the dividend cut. Why did the Times not use those tables? Oh wait.....

I am sure a more sophisticated dynamic stochastic general equilibrium based calculation will be forthcoming from an administration that is using peoples' inability to distinguish between the mean and the median in order to sell their policy.

Posted by: achilles on January 7, 2003 08:04 PM

Municipal bonds -- providing 100% tax-free income to the rich for generations.

Where's all the outrage about them been all these years?

Posted by: Jim Glass on January 7, 2003 09:20 PM

Found a wedge issue, Jim? :D

Posted by: Jason McCullough on January 10, 2003 01:32 PM
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