The tax on distributions from the funds is offset by the deduction on contributions. That's why they're called "tax-deferred." Capital appreciation within the fund is untaxed. So in effect this treatment exempts capital from tax.
To see the difference, imagine after-tax dollars appreciating at rate i(1-t) -- i is the rate of return and t is the marginal tax rate) as opposed to appreciating at rate i and being taxed once at the end.
People with these funds might benefit if the dividend cut causes their share value to increase. They would realize these gains when they take out the money.
Woj is wrong too.
There's significant investor class dough funding vicious right-wing outlets on radio, print, and internet. And there's always Fox.
mbs
Michael quoted:
> The Sacramento Bee -- sacbee.com
>
> The rich are screwing up our democracy
> By Molly Ivins
> -- Think because you have money in the stock market you
> might have a
> stake in eliminating the dividend tax, the centerpiece of the
> president's tax cut -- $300 billion over 10 years? (You
> probably think
> you have money in the stock market because your 401K keeps
> going down
> -- that would be 40 million Americans.) But no! This tax
> break doesn't
> apply to your dividends! The money in your 401K from both
> savings and
> dividends are tax sheltered until you withdraw the money
> -- then all
> of it gets taxed as ordinary income. You don't get any tax break on
> your dividends -- that only goes to the investor class.
> According to
> Kevin Phillips, 1 percent of investors pocketed 42 percent of the
> stock-market gains between 1989 and 1997, while the top 10
> percent of
> the population took 86 percent. These people need a tax cut! They
> haven't been getting their share!
That may be true, but the "investor class" does not put the obnoxious "God Bless Amercia" stickers on their trucks, attend "Bomb Saddam Parties" in sports bars (http://www.thunderdomeonline.com), watch Club 700, curse Fonda Jane, faggots, and feminazis, or beat up war protesters. It is the two-bit 401k and Social Security pricks who do. So far in my life, I received numerous threats from the latter, but nobody from the "investor class" did anything wrong to me. Why should I care about them getting a free ride? That they "corrupt democracy in America?" There is not much to corrupt to being with - the system is alredy rotten to its core.
Muhammad Ali once said that Viet Cong did not call him a n-word, to justify his opposition to the Vientam War. By the same logic, the investor class does not call people like me "pinko-commies" "crackpots" "feminazis" or "polacks" nor do they say "gay" or "jewish" to indicate that something is bad ... You get the drift, no?
Wojtek