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HomeMy Public PortalAboutr 03:043No 03-43 Date of Adoption Jaramry 16, 2003 OPPOSING PRESIDENT BUSH'S PROPOSAL TO ELIMINATE THE TAX ON CORPORATE DIVIDENDS WHEREAS, President Bush has proposed a new economic plan that includes the elimination of the tax on corporate dividends; and WHEREAS, this aspect of President Bush's economic plan could have a negative effect on municipal finances and these concerns have been confirmed by the National League of Cities; and WHEREAS, if implemented, this proposal to eliminate the tax on corporate dividends could have a significant impact on local government finances by making municipal bonds less attractive to investors; and WHEREAS, those individuals seeking to minimize taxes have long purchased municipal bonds because the interest paid on these bonds is tax free; and WHEREAS, if dividends paid to shareholders are no longer taxable, stock ownership may become a more attractive investment for those individuals who may otherwise have purchased municipal bonds; and WHEREAS, to the extent this proposal encourages people to invest in stocks rather than municipal bonds, it may be more difficult and expensive for municipalities to borrow necessary funds for public projects at a time when state and federal funding for local governments is being cut back or eliminated;, and WHEREAS, if it becomes more expensive for municipalities to borrow funds for necessary governmental projects, local property taxes will likely increase as a result; and WHEREAS, it is well recognized that local real estate taxes more negatively impact families of lower and moderate income who are already unfairly burdened under the present economic conditions. NOW, THEREFORE, BE IT RESOLVED that the Mayor and Council of the Borough of Carteret, County of Middlesex, and State of New Jersey, oppose that aspect of President Bush's new economic plan that calls for the elimination of tax on corporate dividends. BE IT FURTHER RESOLVED that a copy of this Resolution be forwarded to: Congressman Robert Menendez and the other members of the Ne~v Jersey Congressional Delegation urging them to oppose this component of President Bush's economic plan. tklopt~l this 16th ¢1~ of ..la,tory, · '~d c~"cifi~] as a t~*m capy of bbe. ot '.nginal cn .Jatnry 17, D_-~2si,m! r~,~k RECORD OF COUNCIL VOTE COUNCILMANKRuM YESx NO NV A.B. COUNCILMANRio~I]YESx NO NV A.B, NAPLES X S06'N(/dSKI X ___ PARISI X S ITARZ X X - Indicate Vote AB - Abseut NV - Not Voting XOR - Indicates Vote to Overrule Veto Adopted at a meeting of the Municipal Council January 16, 2003 CLERK