For Immediate Release
March 14, 2003

Jobs and Economic Growth Fact of the Day

431,000

The Council of Economic Advisers estimates that the dividend provision would produce 431,000 out of the total 1.4 million jobs created by the Presidents jobs and economic growth plan by the end of 2004.

Today's Action

• Secretary of Labor Elaine Chao delivered remarks to the Yonkers Chamber of Commerce today in Yonkers, New York. The Secretary stressed the importance of the Presidents jobs and economic growth plan, including the provision to eliminate the double taxation of dividends, and the significant, immediate impact it would have on the American economy.

• The Presidents proposal to eliminate the unfair double taxation of dividends is an essential piece of his jobs and growth plan. The provision would put more money into peoples pockets, increase investment and job creation, and help turn the stock market around -- all in the first year after the plans adoption.

• The double taxation of dividends hits the Nations seniors the hardest, many of whom rely on dividend income during retirement. One of every two senior filers receives dividend income. As a group, seniors receive nearly half of all taxable dividends paid to shareholders.

• More then half of American households own stock directly or indirectly, and 26 million American taxpayers would receive an average tax cut of $704 in 2003 as a result of the dividend provision in the Presidents plan.

• The Council of Economic Advisers calculates that the dividend provision would produce 31 percent of the new jobs by 2004 431,000 out of the total 1.4 million jobs created by the President's plan.

• The elimination of the unfair double taxation of dividends would provide an immediate boost to the economy. It would:

  • Reduce taxes on shareholders -- injecting $20 billion into the economy in the first year after adoption.

  • Cut the cost of capital for equity-financed business investments by more than 10 percent -- resulting in higher levels of business investment starting this year. More business investment means more jobs and higher wages for American workers.

• The elimination of the double tax on dividends would also have a positive impact on investors' participation in the markets. More companies would be encouraged to offer dividend payments and both the investor and the corporation would benefit from the policy change. The dividend provision would help restore confidence in the stock market and increase consumer spending in the short-term.