The Bush Stimulus Package :: Essays Papers

The render Stimulus Package electric chair Bush has just unveiled his new $674 billion economic stimulant package. The Democrats, although they have little chance of getting it passed in the GOP-controlled Senate, have countered with a plan of their own, with a much lower tab of $136 billion.The centerpiece of the Bush plan is arguably the elimination of the tax on dividends paid by shareholders, which receives up a hefty $364 billion of the entire sum. The reasoning is that it is foul to tax corporate earnings once and then again tax them when they are paid out as dividends to shareholders. However, the presidents system of logic is faulty in that there are many instances of so-called mental image taxation in our society. For example, when one earns a dollar as severalize of ones income, it is taxed and then it is taxed again in the form of sales tax when the dollar is spent. Another criticism lodged at the White dramatic art is that the repeal of the dividends tax benef its the wealthy in a dispro ingredientate manner. Democrats trip out that the wealthiest one pct of Americans would stand to gain over forty percent of the benefits. This is partly due to the fact that the wealthiest generally receive the greatest voice of their income from dividends. Analysts say Mr. Bush is trying to appeal to the new investor class, which straightway includes the majority of Americans. Interestingly enough, senior citizens and retirees comprise a significant portion of stockholders who collect on dividends. That is what allows George W. Bush to claim that repeal of dividends tax is intentional to benefit seniors, when wealthy investors will reap the most reward.The purpose, in possibleness at least, of ending double taxation is to put more money in the hands of investors, and to encourage more Americans to invest in the suffer stock market, which is now near an all-time low. Another beneficial put up will be to encourage large corporations to pay dividends , thus plentiful more money to Americans. If this money goes towards consumption and private and capital investment, the parsimony will inevitably get a much-needed boost, since GDP=C+I+G+X. In addition to elimination of dividend taxation, the Bush plan proposes to make the 2001 tax cuts permanent. Again, one can argue that the wealthy are the primeval beneficiaries of Mr. Bushs tax cuts. But part of the problem stems from constitutive(a) inequities in the tax code.