With the general election less than eight months away, some analysts have started warning investors about the dangers of a Democratic victory. It's a thesis the market generally buys. If presumptive Democratic nominee John Kerry were to be victorious in November, they say, taxes will go up, stocks will fall and bonds will become the investment of choice. But would Kerry really be so terrible for Wall Street? Investors seem to think so. Stocks fell sharply on Monday partly because of concerns about global violence but also because this violence reflects badly on President Bush and hurts his chances for re-election. Criticism of Bush from antiterrorism expert Richard Clarke also was cited by some pundits as a contributing factor to the market's slide. The greatest concern among analysts and investors seems to be that Kerry would raise taxes on dividends and capital gains. The top rate for both was lowered to 15% last year, and some analysts claim that this buoyed stocks in 2003. The tax cut is set to expire at midnight on Dec. 31, 2008. Analysts argue that Bush would push to make these tax cuts permanent and could even advocate lowering these rates to zero, something that is deemed bullish for stocks. Still, it isn't clear that Kerry would increase taxes on dividends and capital gains. Because he hasn't mentioned the issue so far, many Washington observers assume he won't touch these rates, although he almost certainly would raise the top income tax bracket. There's also no guarantee that Bush would be successful in lowering dividend and capital gains rates to zero or extending the tax breaks. After all, he had little success doing this in 2003. Although the composition of the Senate could change in November, giving more control to Republicans, it's not certain that there'd be enough support to cut taxes further or make existing tax cuts permanent.