What a great speech!
| Bush Unveils Economic Stimulus Plan | ||||||||||||||||||||
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Tuesday, January 07, 2003 WASHINGTON — President Bush will seek to make 2001's $1.35 trillion tax cut plan permanent and accelerate cuts slated for 2010 as part of his $674 billion economic stimulus package, he said Tuesday.
Bush said the nation was hit by a triple-whammy -- recession, terror attacks and corporate scandal -- but the economy is still moving forward. "In spite of successes we have more work to do, because too many of our citizens who want to work can't find a job and many of our busineses don't have the confidence to invest and create new jobs." Bush said more needs to be done, and called on Congress to accelerate the tax break for married couples, scheduled for 2009, and speed up the tax credit for families with children, who aren't scheduled to get the break until 2010. "A family of four with two earners and $39,000 in income would receive more than $1,100 in tax relief real money to help pay the bills and push the economy forward," Bush said "And the sooner Congress acts, the sooner help will come." Under the president's plan, 92 million taxpayers will get an average $1,083 tax break, as tax cuts scheduled for 2004 and 2006 are phased in this year instead. The child credit would give an additional $400 to 34 million families who currently claim up to $600. The cost of the bill will be $102 billion this year. The 10-year cost of the child credit is $91 billion, the marriage penalty reduction is $58 billion and reducing the marginal rates is $64 billion. The administration's fact sheet on the plan estimated that 46 million married couples would receive an average tax cut of $1,716 this year, while 23 million small business owners would receive tax cuts averaging $2,042. The tax cuts would be retroactive to Jan. 1. The plan would also eliminate taxes shareholders pay on dividends. According to the president, since companies must already pay a tax on the dividends before they are distributed, they are currently taxed twice. "I am asking the United States to abolish the double taxation of dividends," Bush said. Democrats, however, complained that the president's plan is aimed at the wealthiest Americans. "Most Americans who have investments in the stock market have it through their IRA or their 401K, so that is tax-free anyway," said House Democratic leader Nancy Pelosi of California. The Urban Institute-Brookings Institution Tax Policy Center estimates that 41 percent of the benefits would go to the elderly, but most of that would go to wealthy retirees. Only 6 percent of the benefits would go to elderly people with incomes below $50,000. On Monday, Democrats announced a $136 billion plan they say targets the people who actually need the help. Democrats want to give a $300 tax credit to all taxpayers, even those who don't make enough to owe anything. They also propose a couple of business incentives, including a deduction for new investment. Democrats want to double the amount of investments -- from $25,000 to $50,000 -- that small businesses can claim as a deduction on their income taxes. They would expand a bonus program for businesses who make large investments, but would require them to make the purchases this year. Under the Democratic plan, states would get $31 billion for homeland security, highway, Medicaid and unemployment insurance programs. A White House aide criticized the Democratic plan, saying that shifting federal money to states is not a stimulus. And Evans said the Democrats' package is mainly a spending plan that may help some people temporarily but doesn't benefit the economy much. "You've got a choice to make. Do you want to put the money in the hands of the American people in the form of tax cuts and create incentive for this economy to grow or do you want to spend? And I think the president made it very clear (he wants to) put the money in the hands of the American people, and let them spend it," Evans said. On Tuesday, Bush also proposed "re-employment accounts" of up to $3,000 that people can use for child care, transportation and other costs of finding a new job. The $3.6 billion, two-year plan would put $3,000 into individual accounts for unemployed job hunters to draw from to pay for child care, job training, transportation, moving costs and other expenses of finding a job, senior White House officials said. A person who lands a job in 13 weeks would be able to keep any money left over in their account, the officials said. The officials, who spoke on condition of anonymity, said 60 percent of the bonus money would go to the person when they get a new job. The rest will be awarded after six months on the job. The $3.6 billion will divided among states based on their levels of unemployed. Republicans and Democrats do agree on the need to help the nearly 800,000 workers who have received nearly a year of unemployment benefits so far but who are still looking for jobs. Benefits expired at the end of December. The Senate agreed by a voice vote on Tuesday to extend benefits by 13 weeks. A bill must be presented to the president by Thursday to avoid an interruption in benefits . |
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