Monday, May 01, 2006

Claims about capital gains

The Bush administration cut capital gains taxes. The excuse is that the cuts will supposedly make people more likely to invest in companies, which will be good for the economy. This argument was mentioned this morning on NPR. What supporters ignore is that most people who buy stock do not buy them from the company. They buy stock from other individuals. The stock was probably issued by the company years ago. So you're not helping the company any by buying its stock. However, you might be helping the company officers who have large stock options.

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