Bush tax cuts on the way, questionable stimulus for economy
According to this New York Times story (registration required) the Bush White House is gearing up to announce tax cuts to stimulate the economy:
Even a 50 percent reduction in dividend taxes would total about $150 billion over 10 years and would probably be the centerpiece of his tax plan. Under such a plan, the tax benefits flow almost exclusively to the very wealthiest taxpayers because they are the ones who receive most dividends.
...Citing calculations by the Tax Policy Center [a nonprofit research group run by the Urban Institute and the Brookings Institution], Mr. Daschle said that a person making more than $1 million a year would save $24,000 in taxes under Mr. Bush's plan while a person earning from $40,000 to $50,000 a year would save only $76.
Even non-partisan experts are critical of the expected plan:
"If you are looking for short-term stimulative effect, you don't find it there," said Hank Gutman, head of the federal tax policy practice at KMPG, the accounting firm. "All it means is that people are going to be trading their stocks more. They won't necessarily be investing any more, and companies won't have any more money to spend."