doodledee

Today's opinion based on garbage math brought to you by the Strib's letters to the editor page.

William Cooper owns over 3 million shares of TCF stock, which paid a 97-cent dividend last year. That would be almost $3 million in dividends.

As outlined in his opinion piece with Michael Wigley, taxes on dividends dropped from 30 percent to 15 percent. That means Cooper netted over $700,000 in tax savings on his dividends alone. Add in the capital gains from his sale of TCF stock and other holdings and he has a million reasons to promote the president's tax cuts. It also gives me a million reasons to question his credibility.

[REDACTED], BLOOMINGTON

Data Errors

- The tax rates on dividends didn't drop from 30% to 15%, it dropped from being taxed as "ordinary income" - which could be as high as 35% - to being taxed at a flat 15% for everyone. [duh]
- There's no such thing as a 30% tax bracket. [src]
- TCB paid-out $0.85/share in 2005, not $0.97. [src]

We'll do the math both ways, just for fun.

Bad Data Math

3MM shares * $0.97/share = $2,910,000
Tax owed (30%) = $873,000
Tax owed (15%) = $436,500
"tax savings" = $436,500

Good Data Math

3MM shares * $0.85/share = $2,550,000
Tax owed (30%) = $765,000
Tax owed (15%) = $382,500
"tax savings" = $382,500

I have no idea where the letter writer's $700,000 in "tax savings" came from, but his math gives me 328,000 reasons to question his credibility. Or maybe I'm wrong. Wouldn't be the first time.

Full Disclosure: I'm no fan of TCF Bank, but I do maintain a small account there so I can use their ATM's without being charged a fee. (Genius.) I also don't like that they might be naming the new Gopher stadium after a stupid bank with a crappy website.

Letters to the Editor - 7/30/2006 [strib]
Tax cuts are benefiting our economy [strib] - I think this is the original article