Study: Kerry Poor Choice for Investors By Jimmy
Moore
March 23, 2004 (Talon News)
An independent investment group
study released on Monday finds that likely Democratic presidential nominee John
F. Kerry has had an abominable voting record on investor-related issues throughout
his nearly two decades in the United States Senate.
The American Shareholders
Association (ASA) notes in their study that two out of three voters in the upcoming
2004 presidential election will be investors. This represents the largest voting
bloc in America. As a result, ASA wanted to examine the vital issues related to
investing by the Democratic presidential nominee.
After extensive research
and study of Kerry's voting record, ASA found the Massachusetts senator voted
overwhelmingly against issues important to investors, including cuts in the capital
gains tax and individual retirement accounts (IRA).
Daniel Clifton, who
serves as the executive director for ASA, said Kerry has shown no demonstrative
evidence that proves he would act in the best interest of investors if he is elected
president. "The best way to sum up Kerry's record on investor issues -- all talk
and no action," Clifton remarked in a press release. "Despite his pro-investor
rhetoric, not once has Kerry voted to reduce the capital gains tax, not once has
Kerry voted to index capital gains to inflation, and not once has Kerry voted
to reduce the double tax on dividends." He added, "Even more disturbing has been
his consistent opposition to individual retirement accounts, which currently provide
retirement savings for millions of American families."
Clifton concluded
that Kerry has not shown investors that he fully understands the ramifications
of his votes on investments. "His votes against shareholders have real consequences
and this report documents the effects of these votes," Clifton continued. ASA
said the claim by Kerry during his presidential campaign that he has voted to
cut the capital gains tax cannot be substantiated.
ASA research and analysis
has not been able to find a single vote by Kerry calling for a reduction in the
capital gains tax. However, the study was able to find votes showing Kerry supporting
an increase in the capital gains tax in 1986 by 40 percent and consistently voting
against scaling back the capital gains tax at least 15 times since 1989. "It is
completely disingenuous for Kerry to stand up on stage and say he voted to reduce
the capital gains tax," Clifton expressed. "He was a key player in ensuring the
reductions that failed over the years never made it through and of the reductions
that passed he consistently voted for amendments to strip the capital gains provisions."
Clifton warned, "Investors should not be fooled by Kerry's blatant distortion
of the facts on this key issue." Individual investors rely on lower capital gains
taxes because it allows them to show an increased return on their investments,
provides capital to be reinvested in the stock market, and contributes to the
creation of new investment ventures, the ASA study detailed.
On the issue
of double taxation of dividends, Kerry said in a December 2002 speech that he
would be in favor of abolishing it. However, Kerry changed his tune when Bush
called for the same thing in his 2003 State of the Union address. In fact, ASA
discovered that Kerry almost immediately denounced the plan and eventually voted
against it seven times in 2003 alone after Bush came out in favor of it. Nevertheless,
the legislation passed through Congress and was signed into law by President Bush.
According to ASA, the result of this new law has been more cash in the
pockets of shareholders, more transparency in investment earnings, and more power
for investors in the companies with whom they own stock. Kerry has now proposed
an initiative that would apply the double tax on dividends again despite the fact
that there have been historic gains in the stock market since it was eliminated.
"Kerry's flip-flop on the double taxation of dividends has to be the worst
example of a politician saying one thing and doing another," Clifton exclaimed.
"In just four weeks time he went from calling to abolish the double tax to calling
the proposal a giveaway to rich." Clifton said Kerry's vote against abolishing
the double taxation of dividends did not ultimately lead to bad investment policy
because the legislation passed despite his votes against it.
"Thankfully,
at the end of the process we did not need his support and shareholders are better
off due to the passage of this legislation," he commented.
On the issues
of IRAs, Kerry voted in 1986 to disallow families earning $40 000 or more annually
from deducting this from their income taxes. Actually, he has voted against expanding
IRAs a total of ten times since that vote. "Kerry voted to restrict IRAs in 1986
for the 'wealthy' and when all was said in done participation for families still
eligible for the program declined by 40 percent," Clifton revealed. Clifton said
tax increases on investment capital will have a widespread negative effect on
the U.S. economy.
"Kerry's proposal to increase the capital gains and dividend
double taxes on the 'wealthy' will have the same effect," Clifton concluded. "Stocks
will decline reducing value for all shareholders and companies will return less
cash to all shareholders in the form of dividends. Without question, Kerry's tax
increase proposal will negatively affect all shareholders."
When the Kerry
campaign was struggling for survival in single digits in December, the Democratic
presidential candidate held a press conference to announce his strong opposition
to the mutual fund industry. Eyeing the recent scandals in the industry, Kerry
proclaimed he would fight this "new age of organized crime," in a derogatory reference
to the mutual funds industry. Yet Clifton stated Kerry should be ashamed of himself
for pandering to the liberal wing of the Democratic Party because mutual funds
comprise $7 trillion in assets owned by American workers. "No other moment in
this campaign better demonstrated that Kerry is more interested in becoming president
than helping investors,"
Clifton explained. "Kerry's erroneous and exaggerated
rhetoric was more of a threat to investor confidence than the recent market timing
issues and he continues to talk down the economy because he is worried that an
expanding economy hurts his chances to become President."
Clifton said
Kerry is simply out of touch with real Americans who invest in stocks and mutual
funds. "Based on his voting record, it appears that Kerry believes the only people
who own shares of stock are families named Heinz and Kennedy," Clifton joked referring
to Kerry's wife, Teresa, and his fellow Democratic Massachusetts colleague, Sen.
Ted Kennedy. "That may have been true while Kerry was raising the capital gains
tax as part of the Dukakis Administration, but it sure is not true today, with
56 percent of families' financial assets held in stocks and mutual funds."
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