For Immediate Release
March 14, 2003
Jobs and Economic Growth Fact of the Day
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
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
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
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.
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