Difference Between Private and Independent Schools

Distinction Between Private and Independent Schools At the point when government funded school just isnt attempting to enable a kid to succeed and meet their fullest potential, its normal forâ families to begin to think about elective choices for basic, center or secondary school instruction. At the point when this examination starts, probably tuition based schools will fire springing up as one of those alternatives. Begin accomplishing more examination, and youll likely experience an assortment of data that remembers data and profiles for both non-public schools and free schools, which may leave you scratching your head. It is safe to say that they are something very similar? Whats the distinction? Lets explore.â Likenesses Between Private and Independent Schools There is one major likeness among private and autonomous schools, and that is the factâ that they are non-government funded schools. At the end of the day, they are schools which are subsidized by their own assets, and don't get open financing from the state or administrative government.â Contrasts Between Private and Independent Schools In any case, it appears just as the terms tuition based school and autonomous school are frequently utilized as if they mean something very similar. In all actuality, they are both the equivalent and unique. Considerably increasingly confounded? Lets separate it. In general,â independent schools are really viewed as tuition based schools, yet not every single non-public school are free. So a free school can call itself private or autonomous, however a non-public school can't generally allude to itself as autonomous. Why? All things considered, this unpretentious qualification between a tuition based school and an autonomous school has to do with the lawful structure of every, how they are administered, and how they are financed. A free school has a genuinely autonomous leading group of trustees that administers the schools activity, while aâ private school can hypothetically be a piece of another substance, for example, a revenue driven partnership or a not revenue driven association, for example, a congregation or gathering place. An autonomous leading group of trustees frequently meets a few times each year to talk about the schools by and large wellbeing, including funds, notoriety, improvement, offices, and other significant parts of the schools achievement. The organization at an autonomous school is liable for completing a vital arrangement that guarantees the schools on-going achievement, and reports to the board normally on progress and how they will address or are tending to any difficultie s the school may face.â Outer associations, for example, a strict gathering or other for-benefit or not-revenue driven organization,â that can give money related help to a non-public school, not an autonomous school, will make the school less subject to educational cost and beneficent gifts for endurance. Be that as it may, these tuition based schools may bring about guidelines or potentially limitations from the related association, for example, commanded enlistment limitations and curricular progressions. Free schools, then again, regularly have a one of a kind statement of purpose, and are financed by educational cost installments and beneficent gifts. Regularly, autonomous school educational costs are more costly than their non-public school partners, which is on the grounds that most free schools depend generally on educational cost to subsidize its day by day operations.â Autonomous schools are certify by the National Association of Independent Schools, or NAIS, and regularly have stricter standards for administration than some tuition based schools. Through NAIS, singular states or areas have endorsed authorizing bodies that work to guarantee all schools inside their separate locales meet thorough prerequisites so as to accomplish accreditation status, a procedure that happens at regular intervals. Autonomous schools likewise regularly have huge blessings and huge offices, and incorporate both boarding and day schools. Autonomous schools may have a strict association, and may incorporate strict examinations as a feature of the schools reasoning, however they are represented by a free leading group of trustees and not a bigger strict association. In the event that an autonomous school wishes to change a part of its tasks, for example, dispensing with strict investigations, they just need the endorsement of their leading body of trustees and not an ove rseeing strict establishment. The State of Utah Office of Education offers a run of the mill meaning of a private school:A school that is constrained by an individual or office other than an administrative element, which is typically bolstered basically by other than open assets, and the activity of whose program rests with somebody other than freely chose or selected authorities. McGraw-Hills Higher Education site characterizes a free school as nonpublic school unaffiliated with any congregation or other office. Article altered by Stacy Jagodowski

Inherit The Wind Essay -- essays research papers

     Inherit the Wind, a play composed by Jerome Lawrence, and Robert E. Lee, is one of the best and most disputable plays of now is the ideal time. It was composed during a period of logical transformation to profit individuals of the day and later on, notwithstanding, individuals of the day made some hard memories tolerating new thoughts. It is social orders reluctance to change, and acknowledge new thoughts that make bigotry, and detest gatherings of today. This reluctance is one of the significant subjects of this play. This proposition will be additionally clarified, and upheld by such artistic components, as setting, and character all through the paper.      The first case of the people’s reluctance to acknowledge new thoughts, for example, Darwinian hypothesis, is towards the start of the book when the two sides of the indictment show up in Hillsboro. The town is marching here and there the avenues reciting, â€Å"give me that bygone era religion†, and â€Å"down with Darwin†. The incongruity of this is none of them have perused Darwin’s book, for instance, when E.K. Hornbeck was conversing with Eliza, the Bible sales rep. Eliza stated, that he, â€Å"can’t neither read nor write†, so he was unable to have perused Darwin’s book, however yet he is calling Hornbeck a â€Å"sinner, and â€Å"evil-utionist† for trusting in its thoughts. None of the town’s individuals on Mr. Brady’s side of the preliminary have perused, The Evolution of Species, not even Mr.Brady himself. All things considered, they won't acknowledge the thought or think about it. It is the town’s peopl...

25 Necessary Items For A Room Of Ones Own

25 Necessary Items For A Room Of Ones Own Virginia Woolfs  A Room of Ones Own  was a feminist rallying cry for women to have both economic security and protected, private spaces if they were to truly write. As Woolf wrote in her  essay, A woman must have money and a room of her own if she is to write fiction.” If youre able to lock a door, or even have a quiet sequestered area thats just  yours, these 25 items can help inspire that area  of creation. And, make it a little more beautiful. Okay, and sure, theyre not all necessary but they can create a sense of space in your room that makes it sacred. Especially those Virginia Woolf prayer candles. “Lock up your libraries if you like; but there is no gate, no lock, no bolt that you can set upon the freedom of my mind.” Thinking is my fighting quote: Ya know, no need to keep this strictly in  the room of ones own. Put this beautiful print up in every room of the house. Personalized office door sign: Make sure everyone knows which room is yours. Virginia Woolf prayer candle: YOU DO YOU. Metal tree bookends: For a subtle (and practical) nod to Orlandos oak. A Room of Ones Own hardcover: Display this beautiful version in a place of honor in your room. No need to hurry quote print: Because  sometimes we need the reminder. Writing journal: *praise hands* Another writing journal: Just buy me everything from this shop. Nevertheless, she persisted decal: Timely and appropriate. Antique print of a woman writing: I cant get over how perfect this is. Lighthouse literary candle: With sea salt and floral scents. Beautiful. Nasty woman mug: Woolf was definitely one of the original  nasty women. Virginia Woolf pen: Incredibly on. point. Room of ones own print: Full stop. Mrs. Dalloways tea: Every quiet  room needs tea. Virginia Woolf book bag: For all those books by rad women youll need to carry. Mrs. Dalloway book bag: Seriously, all the books. Mrs. Dalloway print: Hell yah she did. Handmade Virginia Woolf journal: Gorgeous. Anonymous bookmark: Never forget. Virginia Woolf original portrait: Its expensive, but damn I want it. Lighthouse lamp: I love the  subtle nod and simplicity of this piece. Sparkly  smash the patriarchy pens: Woolf would have approved. Virginia Woolf quote on dreams: So gorgeous. So appropriate to hang in a room of ones own. Virginia Woolf wine glass: Because that  room of my own will have wine. If you had (or have) a room of ones own, what would you  fill it with? Sign up to The Goods to  receive emails about new products and promotions in the Book Riot Store. Thank you for signing up! Keep an eye on your inbox.

Saul Alinsky

Saul Alinsky was a political activist and organizer whose work on behalf of poor residents of American cities brought him recognition in the 1960s. He published a book, Rules For Radicals, which appeared in the heated political environment of 1971  and went on to become familiar over the years mostly to those who study political science. Alinsky, who died in 1972, was perhaps destined to fade into obscurity. Yet his name unexpectedly surfaced  with some degree of prominence during high-profile political campaigns in recent years. Alinskys  reputed influence as an organizer has been wielded as a weapon against current political figures, most notably Barack Obama and Hillary Clinton. Alinsky was known to many  in the 1960s. In 1966 the New York Times Magazine published a profile of him titled Making Trouble Is Alinskys Business, a lofty credential for any social activist at the time. And his involvement in various actions, including strikes and protests, received media coverage. Hillary Clinton, as a student at Wellesley College, wrote a senior thesis about Alinskys activism and writings. When she ran for president in 2016 she was attacked for supposedly being a disciple of Alinsky, despite having disagreed with some of the tactics he advocated. Despite the negative attention Alinsky has received in recent years, he was generally respected in his own time. He worked with clergymen and business owners and in his writings and speeches, he stressed self-reliance. Though a self-proclaimed radical, Alinsky  considered himself a patriot and urged Americans to take greater responsibility in society. Those who worked with him recall a man with a sharp mind and a sense of humor who was genuinely concerned with helping those who, he believed, were not being treated fairly in society. Early Life Saul David Alinsky was born in Chicago, Illinois, on January 30, 1909. His parents, who were Russian Jewish immigrants, divorced when he was 13, and Alinsky moved to Los Angeles with his father. He returned to Chicago to attend the University of Chicago, and received a degree in archaeology in 1930. After winning a fellowship to continue his education, Alinsky studied criminology. In 1931, he began to work for the Illinois state government as a sociologist studying topics including juvenile delinquency and organized crime. That work provided a practical education in the problems of urban neighborhoods in the depths of the Great Depression. Activism After several years, Alinsky left his government post to become involved in citizen activism. He co-founded an organization, the Back of the Yards Neighborhood Council, which was focused on bringing about political reform that would improve life in the ethnically diverse neighborhoods adjacent to the famous Chicago stockyards. The organization worked with clergy members, union officials, local business owners, and neighborhood groups to combat problems such as unemployment, insufficient housing, and juvenile delinquency. The Back of the Yards Neighborhood Council, which still exists today, was largely successful in bringing attention to local problems and seeking solutions from the Chicago city government. Following that progress, Alinsky, with funding from the Marshall  Field Foundation, a prominent Chicago charity, launched a more ambitious organization, the Industrial Areas Foundation. The new organization was intended to bring organized action to a variety of neighborhoods in Chicago. Alinsky, as executive director, urged citizens to organize to address grievances. And he advocated protest actions. In 1946, Alinsky published his first book Reveille For Radicals. He argued that democracy would function best if people organized in groups, generally in their own neighborhoods. With organization and leadership, they could then exert political power in positive ways. Though Alinsky proudly used the term radical, he was advocating legal protest within the existing system. In the late 1940s, Chicago experienced racial tensions, as African Americans who had migrated from the South began to settle in the city. In December 1946 Alinskys status as an expert on Chicagos social issues was reflected in an article in the New York Times in which he expressed his fears that Chicago might erupt in major race riots. In 1949 Alinsky published a second book, a biography of John L. Lewis, a prominent labor leader. In a New York Times review of the book, the newspapers labor correspondent called it entertaining and lively, but criticized it for overstating Lewiss desire to challenge Congress and various presidents.   Spreading His Ideas Throughout the 1950s, Alinsky continued his work in trying to improve neighborhoods which he believed mainstream society was ignoring. He began to travel beyond Chicago, spreading his style of advocacy, which centered on protest actions which would pressure, or embarrass, governments to tend to critical issues. As the social changes of the 1960s began to shake America, Alinsky was often critical of young activists. He constantly urged them to organize, telling them that although it was often boring daily work, it would provide benefits in the long run. He told young people not to wait around for a leader with charisma to emerge, but to get involved themselves. As the United States grappled with the problems of poverty and slum neighborhoods, Alinskys ideas seemed to hold promise. He was invited to organize in the barrios of California as well as in poor neighborhoods in cities in upstate New York. Alinsky was often critical of government anti-poverty programs and often found himself at odds with Great Society programs of Lyndon Johnsons administration. He also experienced conflicts with organizations who had invited him to participate in their own anti-poverty programs. In 1965, Alinskys abrasive nature was one of the reasons Syracuse University chose to cut ties with him. In a newspaper interview at the time, Alinsky said: Ive never treated anyone with reverence. That goes for religious leaders, mayors, and millionaires. I think irreverence is basic to a free society. The New York Times Magazine article about him, published on October 10, 1966, quoted what Alinsky would often say to those he sought to organize: The only way to upset the power structure is to goad them, confuse them, irritate them, and most of all, make them live by their own rules. If you make them live by their own rules, youll destroy them. The October 1966 article also described his tactics: In a quarter-century as a professional slum organizer, Alinsky, who is 57, has goaded, confused, and infuriated the power structures of two score communities. In the process he has perfected what social scientists now call Alinsky-type protest, an explosive mixture of rigid discipline, brilliant showmanship, and a street fighters instinct for ruthlessly exploiting his enemys weakness.Alinsky has proved that the fastest way for slum tenants to get results is to picket their landlords suburban homes with signs reading: Your Neighbor Is A Slumlord. As the 1960s went on, Alinskys tactics delivered mixed results, and some localities which had invited were disappointed. In 1971 he published Rules For Radicals, his third and final book. In it, he provides advice for political action and organizing. The book is written in his distinctively irreverent voice, and is filled with entertaining stories that illustrate the lessons he learned over decades of organizing in various communities. On June 12, 1972, Alinsky  died of a heart attack at his home in Carmel, California. Obituaries noted his long career as an organizer. Emergence as a Political Weapon After Alinskys death, some organizations he worked with continued. And Rules For Radicals  became something of a textbook for those interested in community organizing. Alinsky himself, however, generally faded from memory, especially when compared to other figures Americans recalled from the socially turbulent 1960s. The relative obscurity of Alinsky abruptly  ended when Hillary Clinton entered electoral politics. When her opponents discovered that she had written her thesis on Alinsky, they became eager to link her to the long-dead self-professed radical. It was true that Clinton, as a college student, had corresponded with Alinsky, and had written a thesis about his work (which purportedly disagreed with his tactics). At one point, a young Hillary Clinton was even invited to work for Alinsky. But she tended to believe that his tactics were too outside the system, and she chose to attend law school rather than join one of his organizations. The weaponizing of Alinskys reputation accelerated when Barack Obama ran for president in 2008. His few years as a community organizer in Chicago seemed to mirror Alinskys career. Obama and Alinsky never had any contact, of course, as Alinsky died when Obama was not yet in his teens. And the organizations Obama worked for were not those founded by Alinsky. In the 2012 campaign, the name of Alinsky surfaced again as an attack against President Obama as he ran for reelection. And in 2016, at the Republican National Convention, Dr. Ben Carson invoked Alinsky in a peculiar accusation against Hillary Clinton. Carson claimed that Rules For Radicals had been dedicated to Lucifer, which was not accurate. (The book was dedicated to Alinskys wife, Irene; Lucifer was mentioned in passing in a series of epigraphs pointing out historic traditions of protest.) The emergence of Alinskys reputation as essentially a smear tactic to use against political opponents has only given him great prominence, of course. HIs two instructional books, Reveille for Radicals and Rules For Radicals remain in print in paperback editions. Given his irreverent sense of humor, he would probably consider the attacks upon his name from the radical right to be a great compliment. And his legacy as someone who sought to shake up the system seems secure.

Marijuana vs. Alcohol in the United States Essay - 843 Words

Marijuana vs. Alcohol In The United States Marijuana and alcohol are the two most threatening drugs used in America today. Marijuana is the most illicit drug while alcohol is the most abused. Both were illegal during the prohibition but when the constitution was ratified in 1933 alcohol was made legal while marijuana remained illegal. It does not mean that because alcohol is still legal it’s less dangerous than marijuana. Both drugs lead to serious risks and should be taken with caution if used. Marijuana is a mixture of dried, shredded leaves, stems and flowers from a hemp plant better know as Cannabis sativa. Uses of marijuana can be recreational or medical and the earliest recorded uses date from the 3rd millennium BC. (Rudgley, â€Å"The†¦show more content†¦Alcohol is a drug; so mixing it with any other drug can be extremely dangerous. Drinking excessively over a period of time can cause problems with relationships, money or the law. It can also cause severe health problems and even death. From 2001 to 2005 the U.S. Centers for Disease Control and Prevention (CDC) reports on average more than 79,000 deaths per year was caused by excessive alcohol use. (CDC, â€Å"Vital Signs†) Excessive drinking includes binge drinking, heavy drinking and any drinking by pregnant women or minors. On the other hand, the CDC does not have a category for deaths caused by the use of marijuana. Statistically, death directly from marijuana overdose is extremely rare. However, according to the FBI’s Uniform Crime Reporting data, there were a total of 1.5 million drug arrests nationwide in 2011 and out of those arrests around 750,000 were for marijuana alone. (FBI, â€Å"Person’s Arrested†) While both alcohol and marijuana should not be taken with any other drug and getting behind the wheel while drunk or high poses significant risk to everyone. Alcohol is still vastly greater in number when it comes to death than marijuana but then again one is legal while the othe r one is not. The legalization of marijuana has been an argument for over 70 years. Even though voters helped to legalize the drug in Colorado and Washington, it’s still legal for the rest of the United States. There are many pros and cons for marijuanaShow MoreRelatedEssay on Alcohol vs Marijuana1537 Words   |  7 PagesAlcohol vs Marijuana There is no culture in the history of mankind that did not ever use some kind (kinds) of drugs. Despite the well-known consequences of drug addiction, millions of people constantly consume different legal and illegal drugs. Affecting peoples mind and changing their behavior, drugs become one of the most threatening factors of social risk, resulting in increasing rates of mortality, aggressive and criminal behavior, and dissolution of social ties. This paper is devoted toRead MoreShould Marijuana Be Legalized? Essay1714 Words   |  7 Pagesdrug free. 79 years ago, marijuana became prohibited in the United States (PBS). Today, we find the topic of marijuana’s legality in all forms of media and every level of politics. It is now a never ending topic of public debates. The goal is to answer the question that refuses to die: should marijuana be legalized? Marijuana may not be for you, it may make you paranoid or uncomfortable, and no one should be forced to use it; but, legalizin g marijuana in the United States would be beneficial for manyRead More Alcohol vs. Marijuana Essay701 Words   |  3 PagesAlcohol vs. Marijuana Alcohol and marijuana are two drugs commonly used and abused in the United States. Alcohol is the number one abused drug, while marijuana is number one among illegal drugs. While alcohol remains legal, and marijuana illegal, this does not necessarily mean that alcohol is better for you. There have been many arguments where people suggest that marijuana should be legal because alcohol is more deadly. On the other hand, there are alcoholics who would tell a pothead thatRead MoreAlcohol vs. Marijuana Essay699 Words   |  3 PagesAlcohol Vs. Marijuana Alcohol and marijuana are two drugs commonly used and abused in the United States. Alcohol is the number one abused drug, while marijuana is number one among illegal drugs. While alcohol remains legal, and marijuana illegal, this does not necessarily mean that the alcohol is better for you. There have been many arguments where people suggest that marijuana should be legal because alcohol is more deadly. On the other hand, there are alcoholics who would tell a potheadRead MoreWhy Marijuana Should Be Legalized Essay1605 Words   |  7 PagesTable of Contents I. Introduction to Cannabis II. The History of Marijuana III. The Prohibition IV. Economic Benefits of Legalizing Marijuana V. The Medical Benefits of Marijuana VI. Marijuana vs. Alcohol and Tobacco VII. Marijuana Stimulates Creativity and Brain Cell Growth VIII. Conclusion Should marijuana be legalized for recreational and medical purposes? Thesis: Since marijuana is not harshly dangerous to one’s health nor is it a hard narcotic, it should beRead MoreMarijuana vs. Alcohol People are often quick to judge those that use marijuana, but do not judge900 Words   |  4 PagesMarijuana vs. Alcohol People are often quick to judge those that use marijuana, but do not judge those who use alcohol. With medical marijuana on the rise, people are using marijuana almost as much as people using alcohol. People argue the health risk of both marijuana and alcohol, but do people really know what the health risks and benefits are? Excessive use of alcohol is accountable for 88,000 U.S. fatalities each year from 2006 to 2010. The fatalities cost the budget $224 billion according toRead More The Legalization of Marijuana Essay941 Words   |  4 PagesIn the United States marijuana has become of the most widely used drugs (drugpages). A number of movements to legalize marijuana have been gaining attention lately. Currently there are 14 states where marijuana is legal for medical use (medicalmarijuana). 41% of U.S. citizens believe marijuana should be legalized (drugpolicy) but others are still concerned about health damage. American society has lost the war against marijuana, and thats okay. We should stop wasting time and money trying to reverseRead MoreMarijuana vs Alcohol Essay1664 Words   |  7 Pagestwenties, alcohol was sipped cautiously behind the walls of speakeasies; glasses clinking under the flashing lights of entertainment signs. The hippies of the sixties and seventies passed pipes of burning marijuana, promoting peace while protesting for the rights of millions of Americans. No doubt, both drugs have had a major influence on the country, both have had their â€Å"glory† days. After a time of prohibition, the once thought sinful substance of alcohol was re-legalized. Marijuana, on the otherRe ad MoreSupport Marijuana Legalization Now! Essay1676 Words   |  7 Pagescoming, he becomes a self-destructive boy by banging his head and body against the wall causing bruising. However, since after treatment with marijuana (also called cannabis), Alexs illness was significantly improved. His parents curb his seizures by giving him a liquid form of marijuana by mouth 3 times a week. For Alexs family, the benefits of marijuana are greater than the risks. For us, the long-term side effects that are unknown for something that cant kill him are a lot better than the long-termRead MorePrayer, Homosexuality, And Alcohol And Drugs1469 Words   |  6 PagesReligion vs. Secularism in Prayer, Homosexuality, and Alcohol and Drugs The Puritans left England to be able to have the freedom of choosing their religion. Their voyage seems like a long time ago, but still today, America struggles to find the balance between religion and freedom. This paper will discuss three areas where this battle is manifested: public prayer, homosexuality, and alcohol and drugs. America today reflects the outcome of each side’s ability to make laws and the measures that were

Canadian Contribution for World Peace Free Essays

I have read Suresh Canagarajah’s article ‘ The Fortunate Traveler: Shuttling between Communities and Literacies by Economy Class ‘. He is a good writer and he has many good idea about learning English to improve literacies. In Suresh Canagarajah’s opinion, every English learners need to find a adaptive way, that will enhance their interests to learn English. We will write a custom essay sample on Canadian Contribution for World Peace or any similar topic only for you Order Now Countries’ tradition is influencing local people’s aethestic standard, so many readers are hard to accept foreign writing style. As a entreprenant writer, when they faced to conflicting and competing in different communities, they will adjust their writing style. Suresh believes that â€Å"a curiosity towards the language, the ability to intuit languistic rules from observation of actual usage, a metalinguistic awareness of the system behind languages, and the ability to creatively negotiate meaning in text are the good strategy to improve literacy†. In my heart, Chinese is my mother language, and I always talk with my Chinese friends. I’m afraid of saying something to for English speaker. When I sit on the subway or bus, sometimes I will pay attention to somebody’s conversation. At the beginning, I can catch a little information, but gradually I feel it’s hard to follow them. At last, I feel depressed and give up. In Canada, English is used in everywhere. We can learn many grammar and syntactic from there as long as carefully observed. When we read a long article, we maybe feel it’s difficult to finish and understand its meaning. I was accustomed to translate word by word, I know it’s a bad reading habit. In fact, understand the meaning in context can accurately know what message author want to deliver to readers. I think these suggestions are useful. When Suresh Canagarajah come to western academic community, he hasn’t get the expected praise. Suresh believes that â€Å"the exaggerated, passionate personalized style of writing wasn’t universally appreciated in the academic community†. Because Western academic community prefer to restrained and rigid essay rather than personalized and passionate essay. Their tradition and culture influence the writing style, so they are hard to accept foreign writing style. For example , Chinese people think some Chinese author’s opus is very nice, but none of Chinese author can obtain the Nobel Prize in Literature. Because Western audience can’t adapt Chinese writing style and understand the meaning. According to Suresh (1986), the conflicts he has faced as he shuttled between his native community and Western academic community generated many useful insights into the ideological and rhetorical challenges in academic communication. He believes that † be humble when leaning knowledge, adopt a reflective learning attitude, critical questioning of dominant practices, and contextually grounded theorization are the good way to treat conflicts. As a entreprenant writer, when he faced to conflicting and competing in different communities, they will adjust their writing style. Thus, he can try some different kinds of writing style to adapt the audience all over the world . This is a constantly move forward success. I have learned some good strategy to improve lieracy from the article by Suresh Canagarajah, I will try these ideas in learning English. In addition, if I want to write some good essay to please audiences in Canada, I think I need to change my writing style. Suresh is a good model for me to improve lieracy. How to cite Canadian Contribution for World Peace, Essay examples

The Dividend Tax Cut and Interest Rates free essay sample

President George W. Bush announced a package of tax cuts with the hopes that, when implemented, the tax cuts will stimulate the currently slow U. S. Economy. The centerpiece of the Bush plan is to eliminate the taxes investors pay on dividend income. Currently, any money an investor receives when a stock she owns pays a dividend to its investors is added to her total income at tax time. So dividend income is treated the same way, and is taxed at the same rate, as income from working. If the Bush plan becomes law, dividend income will no longer e added to an investors total income. As a result the dividends become exempt from taxation. The exact details of the plan are not currently known, because it has not been debated or passed by Congress yet. As well, there is some uncertainty as to how the government will define dividend and what exemptions, rules, and loopholes will be written into the law. For the purpose of this article, we will assume that the dividend tax cut will be wide ranging and cover most stocks when Congress passes it. The Bush Administration hopes that by eliminating the dividend tax, investors will be encouraged to buy more stocks. This, they believe, will cause a rise in the value of the market. The main question is: where will investors find the money to buy more stocks? Incomes are not likely to increase a lot in the short-term. Thus, if investors are buying more stocks, they must, necessarily, be buying less of something else. It is likely that consumers will buy less of the good that is the closest substitute to stocks, and for most consumers that good is bonds. Bonds are, in essence, a loan taken out by a government or corporation, with the remises to pay back, to holder of the bond, a fixed amount at a later date. Bonds are a close substitute for stocks, because the two goods share many attractive qualities. Both stocks and bonds tend to appreciate in value over time. Also, unlike investments like real estate and collectibles, both bonds and stocks are liquid assets, meaning it is easy and inexpensive to find a buyer anytime one wishes to sell. There are millions of brokers and organizations that will gladly buy your bond at market rates; finding a buyer for your rare beanie baby collection would be much more difficult. Since bonds and stocks are substitutes, and the dividend tax cut will make owning stocks more desirable and bonds would become less desirable to investors. Bonds would be purchased in smaller quantities. Economic theory, as well as common sense, dictates that when demand for a good falls, the price of that good will fall as well. So the dividend tax, while having the intended effect of a rise in the price of stocks, will see a corresponding fall in the price of bonds. Ads Aka Battista Ha HOPSCOTCH broker. Rue rentable cobble19 8 Mope 30TH aqua COCOA Activate days enjoyment noggin Eligibly, Kenneth, CAPTIVITY www. Rusk. Rue Composite Koran Noah. Rapacity Ha monopoly_VIII 2 raga! XX Beach, gal._VOW, Waynesboro-m. Rue object-1 Kaplan a XX Beach AT 21 MM. Tanoak, annotate. Oceanographers! The Dividend Tax Cut and Interest Rates [Part 3: The Dividend Tax Cut How Does This Effect Interest Rates? ] More of this Feature Part 1: The Dividend Tax Cut Bushs Plan Part 2: The Dividend Tax Cut Substitution of Bonds for Stocks Part 3: The Dividend Tax Cut How Does This Effect Interest Rates? Part 4: The Dividend Tax Cut How Does Interest Rate Increases from Bonds Effect You? Part 5: The Dividend Tax Cut The Supply Side Part 6: The Dividend Tax Cut Have Your Say Related Resources Bush Offers Dividend Tax Cut Plan Dividend Tax Cut and Economic Stimulus Plan White House Release Dividend Tax Cut and Economic Stimulus Package Tax Policy Center Information on Dividend Tax Cut What does any of this have to do with interest rates? Well, the interest rate on a bond is inversely related to the price of the bond, meaning that as one goes up, the other goes down. Consider a discount bond with a maturity length of one-year. Suppose you buy a $100 bond with a maturity length of 1 year for $90. This meaner that you pay $90 today, and on this date one year from now, you receive $100. The interest rate you get on this bond (formally called the yield-to-maturity) is calculated by: r = (value price) / value In this equation r is the interest rate (or yield to maturity), price is the price you pay for the bond, and value is the amount you get in one year. Now as the price decreases, the interest rate increases. This increase in the interest rate as the price creases is shown in the following chart for a discount bond with a maturity length of one year. This rise in interest rates will not be limited to Just bonds. Banks and other financial institutions use their customers deposits to either buy bonds or to loan to other customers in the form of mortgages, car loans, and business loans. These loans usually carry an interest rate of Prime + X%, where X is a number based on the likelihood the borrower will go bankrupt and default on the loan. The more likely the lender is to default on the loan, the higher X is: this is why Bill Gates gets a utter rate on his mortgage than you do. Since interest rates tend to be calculated based on Prime and the likelihood of the borrower to go bankrupt, there is a perfect relation between them and the prime rate. The prime rate is the interest rate at which banks lend money for a short- specified term to large corporations that have little chance of going bankrupt in the near future. These loans are, in reality, bonds, since the large corporations have to pay them back at a specified date, and the banks can sell these loans to other banks or institutions if they wish. Thus, if the demand for bonds decreases and causes a rise in the interest rate on bonds, the prime rate will increase (because it is as an interest rate on a bond), and cause the rate of interest to rise on all loans. So far we have Just examined changes in demand, but we know that two factors always affect price: demand and supply. What effect will the elimination of dividend taxation have on the supply of stocks and bonds? We know that consumers are now willing to pay more for stocks, and less for bonds. Corporations obtain funds for new projects by either selling bonds or by issuing new stock. Since selling stocks is now more lucrative than issuing bonds, because of the relative change in prices, we should see more companies selling stocks, and fewer companies issuing bonds. Since the supply of bonds by corporations is decreasing, we should see the price of these bonds increase. So this will mitigate the fall in bond prices caused by changes in demand. In theory, it is possible for the supply effect to outweigh the demand effect; this would happen if there were large enough reductions in the amount of bonds issued. This would cause an overall rise in bond prices, and a lowering in interest tats. This is exactly the opposite of what Ive been arguing so far. However, a dramatic fall in the amount of bonds issued is highly unlikely for two reasons. The first is that companies usually prefer to sell bonds instead of issuing new stocks. This is due to the fact that when a company sells stock, it is diluting the ownership of the company. If a company issues too much stock, there is the risk that the a single investor or group of investors will be able to buy enough stock in the company to take it over, which is called a hostile takeover. Because of this, a big rush of new stock issues is unlikely. The second reason this is unlikely is that corporations are not the only entities that sell bonds. The federal government, along with state and municipal governments and public utilities all issue bonds for their funding needs. Most governments are currently running into budgetary crunches and many are running deficits for the first time in years. The federal government will be forced to run a deficit due to increases in spending and declining revenues due to this tax cut. To finance these deficits, governments will be forced to issue more bonds. Because the number of government issued bonds will increase, we should not expect to see a dramatic drop in the total overall value of bonds issued. Most economists feel that the elimination of the dividend tax will have the intended effect of raising the demand and price of stocks, which will cause a rise in the value of the various stock market indices. However, for any change in policy, we must not just examine the intended impact of the policy, but we must determine what its unintended consequences will be. One of the unintended consequences will be that the dividend tax cut will cause a rise in interest rates. This is bad news if youre planning to buy a car or house in the future, as your monthly payments will rise due to higher interest rates. Unfortunately, I havent seen any scientific studies on how much interest rates will rise due to this policy change. Economic theory can only tell us that interest rates will rise; an extensive econometric study is needed to determine what the magnitude of the rise will be. If you have any thoughts or predictions on what will happen, or know of a study I may have missed, please Join us in the forums. I look forward to hearing your input.