Bush Campaign Lies

Thursday, April 08, 2004

Bush Campaign Lie #23: Kerry Flip-Flopped On Double Taxation Of Dividends 

Here's an example of how a little selective editing can yield what looks like a flip-flop. The Bush folks provide two Kerry quotes which, devoid of any other context, appear to be in stark contradiction to one another:

  1. "[T]o encourage investments in the jobs of the future - I think we should eliminate the tax on capital gains for investments in critical technology companies - zero capital gains on $100 million issuance of stock if it's held for 5 years and has created real jobs. And we should attempt to end the double taxation of dividends."
  2. Kerry also reiterated his opposition to the Republican plan to cut taxes on stock dividends. "This is not the time for a dividends tax cut that goes to individuals," he said.
The thing is, item (2) is a bit misleading. Kerry did oppose a Republican plan to cut taxes on stock dividends, but the plan did much more than that. The plan in question was introduced in the first session of the 108th Congress as S. 1054, and it contained hundreds of changes to the tax code. It's likely that Kerry supported some and opposed others. Why the Associated Press focused on taxation of dividends is a bit puzzling.

If one reads the AP story in its entirety, one notices the following caveat given by Kerry's campaign spokesman, which the Republicans conveniently ignore: "He [Kerry] would like to see the double-taxation of dividends addressed as part of a larger tax reform that closed loopholes rather than, as George Bush proposes, in a way that would blow an even larger hole in the deficit." And in both the AP article and a less spin-driven article in the Des Moines Register, Kerry emphasizes that given the state of the economy and Bush's tax cut plans at the time, a cut in taxes on dividends was not appropriate.

Sure, it sounds like spin, I know. The thing is, if you read the entire speech from which item (1) is excerpted, you see that Kerry means what he says. He voiced his support for the elimination of taxes on dividends as part of an extensive tax-reform package, which includes things such as decreasing the payroll tax and raising the minimum wage, which will certainly never happen with a Republican in the White House.

What this all boils down to is, Kerry believes in tax fairness. Since Bush has already given disproportionate tax relief to the wealthy, Kerry sees no need to give them additional relief from taxation on dividends. But once tax reform is based on fairness, then Kerry is all for ending the dividend tax.

9:48 PM