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Media Alert: Expert Available to Speak on Bush's Tax Plan

January 14, 2003

Stan Feldman, associate professor of finance at Bentley College, is available to speak as an expert on the impact of President Bush's tax plan on small businesses.

Feldman believes that Bush's plan to eliminate double taxation of dividends will have a positive impact on small private businesses. He says the financial condition of private firms will be more transparent and their value will increase as a result.

"Under the current system, private owners try to move as much income as possible to the expense line so the business shows little or no taxable profit and pays virtually no business tax," Feldman explains. "Since the owner is the recipient of this income, it is only subject to one level of taxation at the personal level. By treating the dividend as an expense, the owner only pays tax on the dividend at the personal level.

"Under the proposed legislation, there is less incentive to characterize an owner's income as expenses. Thus owners of private firms should be much more willing to present their financial statements in a way that better reflects the true financial condition of the firm. This, in turn, will make the financial condition of private firms more transparent and therefore less risky, and the value placed on them will be much greater."

Stan adds that this higher valuation of small businesses may have a benefit to the greater public, as well.

"The preponderance of private firms are owned by baby boomers, the vast majority of whom are planning to transition their businesses over the next ten years," Feldman says. "Assuming that the estate tax remains, higher valuations of private firms will create greater estate tax revenue than would be the case under the current tax regime. While this will not help solve the current state fiscal crisis, it will become an important source of incremental revenue moving forward."

Stan Feldman is associate professor of Finance at Bentley College in Waltham, MA. He is co-author of "What Every Business Owner Should Know about Valuing their Business" (McGraw-Hill, 2002), the first resource to provide business owners an introduction to how potential buyers, the Internal Revenue Service and business brokers determine the fair market value of a privately held business. He is co-founder of which provides business valuation services online at and has consulted on valuation for more than 10 years. Feldman has been published in Review of Economics and Statistics, Managerial and Decision Economics, and Levy Institute Proceedings on Industry Profitability and was a regular contributor to the Boston Business Journal.

BENTLEY UNIVERSITY is one of the nation’s leading business schools, dedicated to preparing a new kind of business leader – one with the deep technical skills, broad global perspective, and high ethical standards required to make a difference in an ever-changing world. Our rich, diverse arts and sciences program, combined with an advanced business curriculum, prepares informed professionals who make an impact in their chosen fields. Located on a classic New England campus minutes from Boston, Bentley is a dynamic community of leaders, scholars and creative thinkers. The Graduate School emphasizes the impact of technology on business practice, in offerings that include MBA and Master of Science programs, PhD programs in accountancy and in business, and customized executive education programs. The university enrolls approximately 4,100 full-time undergraduate, 140 adult part-time undergraduate, 1,430 graduate, and 43 doctoral students. Bentley is accredited by the New England Association of Schools and Colleges; AACSB International – The Association to Advance Collegiate Schools of Business; and the European Quality Improvement System, which benchmarks quality in management and business education. For more information, please visit

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