Pass President Bush’s Economic Growth and Jobs Creation Plan
What: President Bush has proposed a bold new tax cut package that would greatly accelerate economic growth and create millions of new jobs for Americans. The President’s plan would: accelerate the 2001 tax cuts scheduled for 2004 and 2006, retroactive to January 2003; eliminate the marriage penalty that affects millions of couples; increase the child tax credit from $600 to $1,000 per child; completely eliminate the double taxation of dividends; increase the amount America’s small businesses may write off from their federal tax liability from $25,000 to $75,000; and, broaden the 10 percent tax bracket.
When: The House Ways and Means Committee conducted hearings on the issue in early March. The committee hopes to have a bill marked up and approved by the committee and on the House floor by late March. The Senate has yet to schedule hearings. Congress hopes to have a tax cut bill on the president’s desk by the end of April.
Call-to-Action: It is imperative that activists contact their legislators. Anyone receiving dividend income is critically affected and must take action.
1. Send a letter to your members of Congress urging their support of the President’s plan by using the CSE capwiz tool – it’s easy and only takes a minute. Click here! (LINK TO CAPWIZ)
2. Write a letter about why the President’s plan is so important to you and send it to the editors of your local newspapers – you can use the talking points and sample letter provided below for ideas.
3. In addition, schedule district office visits with your respective congressman and both senators, or simply call them. Let them know that you want Congress to support these important reforms and let us know how they react. Call us toll-free at 1-888-564-6273 (x7643) or email us at cse@cse.org.
TALKING POINTS
The President’s plan would:
• Make all the tax rate reductions from the 2001 tax law effective this year—and retroactive to January 1, 2003.
• Upon passage, the President will order the Treasury Department to immediately adjust the amount of money withheld for income taxes, so that Americans will keep more of their paychecks right away.
• For income earned after January 1, 2003, the following tax rates would be in effect:
10%, 15%, 25%, 28%, 33%, 35%
The President’s plan would also bring middle-income families additional relief by speeding up three other tax reductions promised in 2001. It would:
• Reduce the marriage penalty this year, instead of waiting until 2009. An estimated 46 million married couples would benefit under the President’s plan.
• Raise the child tax credit from $600 to $1,000 per child this year, instead of in 2010. That would amount to a $400 increase per child, and checks would be issued in that amount this year to help parents across America. An estimated 34 million families with children would benefit under the President’s plan.
• Move several million working Americans into the lowest tax bracket of 10 percent now instead of waiting until 2008.
The President proposed two new steps to encourage individuals and businesses to invest in America’s economy.
End the double taxation of dividends
• Roughly 35 million American households receive dividend income that is taxable and will directly benefit under the President’s plan. More than half of these dividends go to America’s seniors, many of whom rely on these checks for a steady source of income in their retirement.
• Yet seniors and other investors are not getting the full benefit of their investments because those investments are taxed twice. The IRS taxes a company on its profits, then it taxes the investors who receive the profits as dividends. The result is that for every dollar of profit a company could pay out in dividends, as little as 40 cents can actually reach shareholders.
• The President’s plan would eliminate the double taxation of dividends for millions of stockholders – allowing taxpayers to exclude dividend payments from their taxable income – and returning about $20 billion this year to the economy.
Increase incentives for small businesses to grow
• Small businesses create the majority of new jobs and account for half the output of the economy.
• Current tax laws permit them to write off as expenses up to $25,000 worth of equipment purchases. The President’s plan would increase that limit to $75,000 and index it to inflation – encouraging them to buy technology, machinery, and other equipment they need to expand.
The President’s jobs and growth package will provide $98 billion of total tax relief over the next 16 months and $670 billion over the next decade. It will spur real overall economic growth, yet it is disciplined and tailored to address specific challenges.
SAMPLE LETTER ON THE PRESIDENT’S PLAN
Dear Legislator/Editor:
President Bush recently outlined an economic growth and jobs creation package that would bolster economic growth and create millions of jobs for Americans. The plan would immediately give a boost to our economy and facilitate long-term economic growth. I urge you to support the President’s proposal.
Americans will win with a plan that accelerates the tax cuts passed in 2001. By lowering the income tax burden on Americans, they will have more resources to save for their family, invest for their future, and spend for their comfort. Moreover, a growth plan that eliminates the double taxation of dividends is not only fair but would allow individuals to invest more capital into successful companies. Importantly, President Bush understands that a driving force for the American economy is our small, medium, and family businesses. By enabling business owners to expense thousands of dollars more per year will provide considerable resources to spend on capital improvements or to hire more employees.
Other features of the plan will contribute to economic growth as well. It will increase the child tax credit and alleviate the marriage tax that affects millions of couples. These provisions should be included in a final bill for the President’s signature. It’s time to enact policies that grow our economy and create more jobs for Americans.
I hope you will fully support the President’s plan.
Member,
Citizens for a Sound Economy
