Granted, lots of that dividend money will get reinvested in either my company or another, which is good for the economy. But ALL the profits I reinvest get reinvested, which is better. And since I have profits to play with, I'm presumably a good company, reinvesting in my company should, unless I've hit a growth limit, be a better-than-usual investment, both in terms of my own ROI and the health of the economy.

The problem is with the second part of your theory there. In fact, a good percentage of the reinvestment money is spent on mergers, acquisitions, finance games and various forms of legal bribery. These things all help to increase short term profitablity, or at least the short term stock price. But they don't tend to generate jobs or otherwise help the economy.

And that is assuming the executive don't convert the money into perks and then use various stuctured finance schemes to cover their stock inflating actions.

In the long run, money from dividends has a couple of advantages that help the economy. First, it is real money, so it's harder for a company to use trickery to provide dividends. Second, they encourage a more rational and long term view of the value of a company. Rather then value a company on how they expect the stock to do in the next few months, they will be directed towards picking one that can show consistant real profits. Third, because they enourage people to hold onto stocks for longer, they encourage the companies to invest in things with longer term payoff, such as research and infrastructure.

However, over the short term, I don't think the dividend tax elimination is going to help. It's to long term of a benifit to help the economy over the next few years, particularly since there is a lot of behavior to be unlearned by investors.

Jay