Alex's Outlook

Wednesday, May 07, 2003

Bush Tax Cut, RIP

Senate Finance Committe chairman Charles Grassley has written a "tax-cut" bill. At about $41 billion dollars a year out of a $2.25 trillion budget (less than .2% of federal revenues), it cuts dividend tax cuts by one-third in 2003, two-thirds in 2004, and kills the dividend tax cut completely in 2005. Then the provision "sunsets" - and the dividend tax is back up to 38.6%. Oops. Even then, his bill still cracks the $35 billion a year ceiling of the "moderates'" , so Grassley is going to have to sock it to corporations relocating offshore to make up for the shortfall. (Maybe America's punitive corporate and dividend tax rates are precisely why corporations are running from the US in the first place?)

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