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Right idea, right time?
By Bill Schneider
(CNN) -- Victor Hugo once said that nothing is more powerful than an idea whose time has come. But he didn't say where the idea would come from. Put together a powerful idea and the right time and you just might come up with the political Play of the Week. Remember the "supply-side" economists? They're the guys who convinced President Reagan back in the '80s that you could cut taxes and still balance the budget. It didn't quite work out that way. Because Congress refused to cut domestic spending, they said. Well, for years supply-siders have been kicking around another idea. And look where it ended up this week. President Bush said in a speech touting his economic plan last Tuesday, "By ending the double taxation of dividends, we will increase the return on investing, which will draw more money into the markets." How did it get there? Supply-siders just hate the idea that money can be taxed twice. Corporations pay tax on profits. Then shareholders pay a tax on dividends. Outrageous. Activists like Club for Growth President Stephen Moore and former Reagan economic adviser Lawrence Kudlow -- who now has a TV talk show -- have been railing against the dividend tax for years. Why is this suddenly the right time for a dividend tax cut? Because the stock market has been dropping for two years now. "I think that the 98 million Americans who are investors are going to benefit from this. Anyone who owns stock is going to see an increase in the valuation of their stock," Moore said. Supply-siders have won the day. They've also won the political Play of the Week. Will the millions of Americans who hold stocks in their pension plans get a tax cut? No, because their dividends are not taxed now. They'll still have to pay income taxes when they retire and take the money out. But you know what? That's years from now.
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