Stop Press: Dog Bites Man

And wealthy CEOs and Wall Street executives think Bush's tax plan is really cool. Guess we'd better tear up page one . . .

Bush unveils $674B stimulus plan

CHICAGO (AP) — President Bush proposed "growth and jobs" plan to stimulate the economy Tuesday, offering a sweeping package of tax cuts and incentives that would eliminate all federal taxes on stock dividends.

The president said the centerpiece of his proposal — the complete elimination of federal income taxes on stock dividends — would help correct an imbalance in the tax code under which dividends are now taxed at a higher rate than profits from stock sales.

Bush addressed some 2,300 business leaders in downtown Chicago, and many of them cheered his economic plan during interviews.

"The dividend tax cuts are a good idea — people will move more money into the market, because their earnings will be taxed less," said Jeffrey Katz, chief executive officer of Orbitz.

John Leonard, the chief of North American equities for UBS Global Asset Management, said Bush's growth package was "pretty appealing."

Seriously, though, you can see where they're going with this:

"help correct an imbalance in the tax code under which dividends are now taxed at a higher rate than profits from stock sales (i.e. capital gains).

So next year, after this thing passes, all the little GOP munchkins can start talking about how we need to correct the "imbalance" of taxing capital gains at a higher rate than dividends.

And then, after Bush win's reelection in 2004, they can explain why dividends and capital gains really should be income tax credit items.

For the ultrawealthy, the highest possible return on capital is what they earn on their political contributions to the Republican Party. So maybe those should be tax credit items?

Don't be surprised if the Heritage Foundation puts out a white paper on that idea any day now.

Billmon

Posted January 07, 2003 01:01 PM | Comments (103)