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Jobs and Growth Package Response
Here is what prominent economic experts are saying about the Presidents economic growth proposal:
"President Bush's fiscal stimulus package is desirable not only to deal with the current sluggishness in the economy, but also with the longer term problems arising from disincentives to save, invest and work in America."
The Presidents economic growth package is a very positive step forward for investors, workers, and taxpayers. For the sake of the economy, we hope that Congress will speedily enact the President's tax relief proposals and NTU will be working toward that goal.
"The package is a great New Year's surprise. We'll be raising our economic and equity outlooks and lowering our unemployment rate expectations."
"A brilliant, double-barreled tax cut that will increase the income of every American worker and create millions of new and better jobs."
President Bush's proposed growth plan is not just a bunch of random tax cuts, it is a plan that really pushes the growth buttons by improving incentives to work, save and invest, and is a step toward real tax reform. This package, along with recent improvements in the tax treatment of business investment, will give a real lift to jobs and GDP.
"By accelerating tax rate reductions and eliminating the double-taxation of dividends, President Bush's tax package would significantly increase the economy's performance. But the proposal also represents much-need tax reform and is a significant step toward a simple and fair system like the flat tax."
"President Bush's proposal on dividends ameliorates the double-taxation of corporate profits, ending the incentives in our tax code #1 to over-leverage business, with the consequence of too much debt and vulnerability to the business cycle, and #2 to over-rely on accounting numbers rather than the pay-out of cash. His proposal on expensing of capital expenditures will help invigorate our economic recovery."
"The double taxation of dividends has never made sense and this is a perfect time to remove this crazy form of taxation. It not only harms economic growth in the obvious ways, but also in subtle ways. Given the wave of recent corporate scandals, this is the perfect time to introduce a policy change that will simultaneously increase investor confidence while creating greater accountability for managers."
"Taxpayers at all income levels should cheer President Bush's call for greater tax relief. These pro-growth and pro-family tax cuts are well-timed to provide stimulus for the U.S. economy."
The President's proposal eliminates unfairness in the tax code, distributes the gains widely to Americans who pay income taxes, and creates incentives for growth. What more can we ask?
"The President Economic Growth Package is a solid and aggressive plan to further boost economic growth and job creation in 2003 and beyond. The cuts in marginal tax rates will allow all individuals to better spend, save, and invest, and they are especially beneficial to the ongoing viability of the small businesses that pay taxes at the individual level such as Subchapter S Corporations."
I think this is a bold economic package that both provides much-needed near-term economic stimulus and boosts after-tax incentives for growth and investment. The current double-taxation of dividends is unjustifiable on economic efficiency grounds and its elimination should provide a welcome lift to the equity market by increasing after-tax returns on stocks and further improve corporate governance by encouraging firms to increase dividend payouts. The acceleration of the marginal tax rate cuts from 2006 into 2003 should eliminate incentives to defer income and economic activity, which in turn should further boost economic growth in 2003. This is the most significant proposal to roll back tax disincentives to growth and stimulate the economy since the Reagan tax cuts.
"This is the type of bold action needed to jump start the stagnant U.S. economy. When these measures go into effect, the U.S. industrial sector will resume its role of innovating and creating jobs to provide an engine for growth in the global economy."
The president's plan is directly targeting consumer spending and investment incentives. The reduction of marriage penalty, the increase in child tax credit, the extension of unemployment benefit and speeding up tax relief will help revive consumer spending, increase confidence and boost aggregate demand in the short-run. The end of double taxation of dividends and increasing incentives for small businesses should help sustain momentum in favor of job creation and long-term growth.
"Once again, President Bush is demonstrating his strong leadership ability. This stimulus package is just the type of measure this economy needs to get back on track. Just upon hearing about it the markets have reacted wildly in response. Imagine how it'll be when it's enacted."
"Business investment is key to fostering healthy levels of economic growth. President Bush's plan offers much needed capital and incentives to the sector of the economy shouldering the bulk of job creation, economic growth and innovation -- small businesses and entrepreneurs. We are also encouraged by the President's proposal to eliminate the double taxation of dividends. With the strength of the economy becoming increasingly dependent on the health of the equity markets, this measure will help restore both certainty and investor confidence. The overall package is good for small business, which means it's good for America."
The President's plan alleviates one of the most economically destructive distortions in the tax law and also provides welcome relief to small businesses.
President Bushs Taking Action to Strengthen Americas Economy plan is a sound and well thought out policy package. The plan offers not only short-term stimulus for the American economy but it also lays the foundation for long-term, non-inflationary, economic growth for the decades ahead. By extending unemployment benefits, the plan reaches out to those workers who, through no fault of their own, find themselves out of work. In addition, the creation of the new Personal Reemployment Accounts will help to ensure that America has the most dynamic labor markets the world has ever seen. One of the most impressive things about the plan is that it is not limited to only short-term stimulus. President Bush obviously understands the importance of long-term economic growth for Americas future. By eliminating the double taxation of dividend income President Bushs plan will allow Americans to save for effectively for their retirements and to save money for their childrens future. In addition, by encouraging small businesses to invest and invent the plan will help to ensure the rapid advancement of American productivity. These productivity increases will help to insure that Americas children of today will enjoy a higher standard of living than their parents and their grandparents. The positive effects of the Presidents plan will be felt for decades into the future.
A far-reaching reform of the U.S. tax system to reduce the large distortions implied by the existing structure of taxes on capital income is long overdue. Studies published in leading economics journals show that the welfare of U.S. households improves by an amount equivalent to an increase of between 1.5 to 3 percent per quarter forever because of the tremendous efficiency gains that the economy stands to make from lower taxes on dividends and other forms of capital income. These findings are not driven by glossy budgetary arithmetics. In fact, they follow from economic models that impose though assumptions keeping current levels of government expenditures and transfer payments covered and making the long-run rate of economic growth independent of the tax cuts.