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Highlights of the president’s plan call
for:
--An end to taxes on dividends that are
paid to investors.
--An increase from $25,000 to $75,000
as the amount a business could write off on capital investment, and
this amount would be indexed for inflation.
--Lower income tax rates for families
scheduled to go into effect in 2004 and 2006 would now be
retroactive to Jan. 1, 2003.
--The so-called "marriage penalty" tax,
scheduled to be decreased in 2009, would be decreased retroactive to
Jan. 1, 2003.
--Families with children would receive
an increase in the tax credit from $600 to $1,000 per child under
age 17 this year instead in 2010.
--The top four tax brackets would be
reduced immediately, and millions of Americans would move into the
lowest bracket, at 10 percent, this year instead of waiting until
2008.
--A total of $3.6 billion would be made
available to states to help unemployed people and for job retraining
programs.
--An unemployed person would have up to
$3,000 available for expenses incurred in looking for a job.
The savings for each family or
individual would be dependent on many factors; however, according to
administration estimates, 92 million taxpayers would receive, on
average, a tax cut of $1,083 in 2003.
The president’s plan calls for an
immediate $102 billion of tax cuts in 2003, with the remaining $572
billion to be phased in over the next 10 years.
Democratic leaders immediately assailed
the Bush proposal as a plan that favors the rich and proposed their
own $136 billion plan focused on tax cuts, help for the unemployed
and a package of aid for states.
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Initial reaction at the national level
was evenly divided. An MSNBC poll of 36,668 people, when asked if
they thought the president’s plan would work, showed a slim 51
percent compared with 49 percent who thought the Bush plan would not
work and does not do enough for the average American
On the local level, Mayor Beth Davis of
Lincoln responded favorably to the Bush proposal. When asked
specifically whether the proposal’s allowance for a business to
write off a greater amount of capital investment would aid the local
efforts to build an industrial park, she responded, "The city should
now move forward with the industrial park proposal, as business may
be more inclined to expand."
Logan County Board member Pat O'Neill,
while stressing that he is a strong supporter of economic
development, wanted to take a more cautious route. "Until I see an
economic turnaround nationally, I don't think pursuing the
industrial park would be a wise choice at this time." O'Neill
pointed to a Peoria factory that had recently closed, with
approximately 200 people losing their jobs.
Clarence Barney of H&R Block in Lincoln
believed that "doing away with the dividend tax" would be the major
stimulus to the economy. Mr. Barney stated that he would, in fact,
probably "see a decrease in business because it would make the
filing of tax returns easier" if stock dividends are no longer taxed
for the individual taxpayer.
The
president’s proposal will now move on to the Congress, where the
House and Senate will begin debate on the plan. Both Republicans and
Democrats expect changes to be made and expect some type of
compromise proposal to be agreed upon, possibly sometime this
summer.
[Ken Ebelherr]
For more information on the president's
plan, see
http://www.whitehouse.gov/.
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