Merrill Lynch Doubts Complete Elimination Of Dividend Tax Cut

By John S. McClenahen A week after its formal proposal by the Bush Administration, elimination of the so-called double taxation of corporate dividends is in political trouble. Both Republican and Democratic lawmakers on Capitol Hill are attacking that part of the White House economic plan, a provision that's estimated to cost the Treasury $364 billion in lost revenues over 10 years. "The full elimination . . . is unlikely," says Merrill Lynch & Co., New York. "Our view is that dividend taxes could be cut by half; more likely, they'll be reduced to 20%, putting them in line with capital-gains taxes."

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