Aknauta
01-09-2003, 02:26 AM
townhall.com
Larry Kudlow
January 9, 2003
Bush's big bang
President Bush has surprised nearly everyone with his decision to propose a big-bang economic growth package that includes a 100 percent tax exemption on dividends received by individuals. Eliminating the double taxation of corporate dividends will raise stock-market values, increase investor returns, and improve both corporate governance and corporate finance practices, in effect becoming the most significant pro-growth tax reform since President Ronald Reagan slashed personal income-tax rates 20 years ago.
This policy change will lower the effective tax rate on dividends paid from corporate profits to 35 percent from roughly 70 percent. Taxpayers receiving dividends will now keep 65 cents of each new dollar of corporate profits, rather than the 30 cents they now retain under current tax law.
Since individuals and businesses spend and invest their money more wisely than government, this tax reform will make the economy more efficient and better able to grow to its potential. The move will also free up more investment resources for shareholders and corporations, thus making more funds available for entrepreneurship, business expansion, and job creation in the years ahead.
The president has correctly understood his midterm election mandate (http://www.townhall.com/columnists/larrykudlow/lk20030109.shtml)
Larry Kudlow
January 9, 2003
Bush's big bang
President Bush has surprised nearly everyone with his decision to propose a big-bang economic growth package that includes a 100 percent tax exemption on dividends received by individuals. Eliminating the double taxation of corporate dividends will raise stock-market values, increase investor returns, and improve both corporate governance and corporate finance practices, in effect becoming the most significant pro-growth tax reform since President Ronald Reagan slashed personal income-tax rates 20 years ago.
This policy change will lower the effective tax rate on dividends paid from corporate profits to 35 percent from roughly 70 percent. Taxpayers receiving dividends will now keep 65 cents of each new dollar of corporate profits, rather than the 30 cents they now retain under current tax law.
Since individuals and businesses spend and invest their money more wisely than government, this tax reform will make the economy more efficient and better able to grow to its potential. The move will also free up more investment resources for shareholders and corporations, thus making more funds available for entrepreneurship, business expansion, and job creation in the years ahead.
The president has correctly understood his midterm election mandate (http://www.townhall.com/columnists/larrykudlow/lk20030109.shtml)