December 25, 2002

White House officials reportedly urge Pres Bush to propose cutting taxes on corporate dividends for shareholders by about half as part of tax-cutting plan he will announce in January; proposal is intended to stimulate economy and reduce what many economists says is incentive in current law for companies to avoid paying dividends and to run up debt; many economists are skeptical that cut in dividend taxes would provide much immediate stimulus to economy, Bush's most important justification for new tax cuts; 50 percent cut would cost Treasury more than $100 million over 10 years, and tax benefits would overwhelmingly flow to nation's very wealthiest taxpayers (M)

Afghanistan has achieved degree of stability in year since Hamid Karzai began governing, even if it is not yet united country with functioning multiethnic army; Karzai acknowledges some failures of his government, namely security and disarmament, and vows to tackle those issues more energetically in year ahead; Burhanuddin Rabbani, former president who last year opposed Karzai's presidency, now voices unreserved support for him and central government; American forces based in country now contemplate moving from combat operations toward development activities, deploying larger teams of civil affairs officers in 8 to 10 provincial centers to give boost to economic development; American officials say battle against Taliban and Al Qaeda is drawing to end and effort to win peace and help government establish its control countrywide is new target; economic condition of country remain precarious; regional warlords continue to flex enormous power, but Karzai is intent on winning them over by persuasion rather than force of arms (M)

Organization for Economic Cooperation and Development and International Monetary Fund are offering advice on Japan's bank problems; OECD recently said Japan's banks need more taxpayer money to survive; IMF is in middle of yearlong inspection of banks that some hope will shed light on problem of bad loans; former IMF economist Sayuri Shirai says report, scheduled for next summer, will prove that several banks do not meet international capital standards (M)

Selena Roberts Sports of The Times column discusses scholarship athletes like Ohio State University tight end Ben Hartstock and Miami University defensive lineman Jim Wilson, contending that free education, networking opportunities and potential future recognition makes playing for scholarship worthwhile; photos (M)

Federal appeals court strikes down Maine's program that requires drug makers to sell drugs to state Medicaid programs at discounts that typically reduce retail prices by 18 percent and to give similar discounts to tens of thousands of people who earn too much to qualify for Medicaid; finds that goal of program is to provide prescription drug benefit without creating net costs for state, placing entire burden in drug companies; program was approved by Department of Health and Human Services in waning days of Clinton administration and was challenged by drug industry; number of states have filed bills to establish drug-discount programs like one in Maine (M)

Analysts and economists study John W Snow's leadership at CSX to figure out what his future stewardship of Treasury Dept will mean for country; note company's safety record has improved markedly in recent years; say Snow's time at CSX will be recalled as era when unfocused transportation conglomerate was transformed into Eastern United States' largest rail carrier; although CSX lowered its third-quarter earnings forecast, most Wall St analysts see it as poised for growth when economy rebounds; big question is how much direct credit, or blame, Snow deserves for company's record under his watch; by many accounts, he has been more a strategist and lobbyist for CSX than an active operations executive; photo; chart (M)

China releases Xu Wenli, its most prominent pro-democracy prisoners, sending him to exile and medical treatment in US; Wenli, who spent more than 16 of last 21 years in prison for his irrepressible advocacy of civil liberties, suffers from chronic and progressive infection with hepatitis B; his release signals China's strong desire for good relations with US; photo of Xu being greeted by his daughter at O'Hare Airport in Chicago (M)

Outsourcing by American companies to Indian concerns or their own Indian units has begun to pick up after slowing in wake of Sept 11 terrorist attacks; new contracts span technology-related spectrum; unit of Bangalore-based Wipro, India's third-largest software and services exporter, will be handling some of worldwide reservation services for Delta Air Lines, move that Delta expects to save $12 million to $15 million annually; Tata Consultancy Services, India's top software company, has signed up Lehman Brothers--in $70 million-a-year deal shared with Wipro--as well as J P Morgan Chase, Fidelity Investments and GE Medical Systems; local Indian unit of Cognizant Technology Solutions, custom software developer and services provider in Teaneck, NJ, has contracts for projects from MetLife and from UnitedHealth Group and Sallie Mae; photo (M)

Japan's merchandise trade surplus grew 81 percent in November from year ago, as exports grew faster than expected; shipments overseas grew 5.3 percent, to high in November; exports to and imports from US both expanded (S)

Zembei Mizoguchi is chosen to run Finance Ministry's foreign exchange policy, suceeding Haruhiko Kuroda; will help decide when Japan trades currencies in financial markets to affect exchange rates; photo (S)

Article on growing number of niche crime and public safety shows that are being offered by cable television networks, including Animal Planet, Travel Channel, Outdoor Channel and Weather Channel; photo (M)

Steven Spielberg's supremely entertaining fable of self-invention in the land of opportunity tells the true story of Frank Abagnale Jr. (Leonardo DiCaprio), a teenager from New Rochelle, N.Y., who by the age of 19 had successfully impersonated an airline pilot, a doctor and a lawyer and amassed millions of dollars from forging checks. Part comedy, part caper film, this picaresque tale gently satirizes the sillier side of the swinging 60's. It is also a cat-and-mouse game in which Frank tries to elude Carl Hanratty (Tom Hanks), an earnest, fuddy-fuddy F.B.I. agent who finally catches up with him in France. Mr. DiCaprio, that chameleonic 28-year-old man child, is, in a word, sensational. — A. O. Scott