- The Washington Times - Friday, January 17, 2003

As if on cue in a bad B movie, the Left exploded with a barrage of attacks on President Bush's economic growth package using their tired old class-warfare rhetoric. We all know the routine by now: Only "the rich" have a pension plan or money in the stock market; only "the upper-class" pay taxes on stock dividends; the "regular people" get burned. In fact, just the opposite is true; Seniors are helped by the Bush plan. If we listen closely, we learn just how little the left understands the American taxpayer, the average investor, seniors, and basic economics.
It is senior citizens who receive over half of all stock dividends paid. And while everyone who pays taxes would benefit from Mr. Bush's plan to accelerate reductions in tax rates, the marriage penalty relief, and/or increasing the child tax credit, it is our nation's retirees who will deeply benefit from the end of double taxation on stock dividends. This year an estimated 35.4 million stockholders will receive dividends from corporations that without passage of the Bush plan they would have to include in their taxable income. Of the 28 million taxpayers age 65 and older, 9.8 million receive dividends. That represents 28 percent of all taxpayers receiving dividends.
Senior citizen investors are hardworking Americans who built pensions during their working years and some who also invested on their own in the stock market. They scrimped and saved throughout their working lives so they could provide for their retirement above and beyond what Social Security would give them. These seniors did just what all workers today should do take some personal responsibility for their retirement future. Yet, our nation's tax policy actually punishes them for investing in our markets.
In fact, after taxing companies when they earn their profits, the Internal Revenue Service now taxes individual investors who receive the profits as dividends. This is double taxation on the same profits. Shareholders are in effect penalized for investing in our nation's economy and businesses. And it's not simply the rich who are paying the price for this ridiculous policy. It's average Americans and senior citizens who make as little as $15,000 or $30,000 a year. In fact, of the 12.6 million taxpayers who are age 65 and older with an income over $15,000, 58 percent receive dividends. Of the 8.2 million taxpayers 65 and older with incomes over $30,000, a whopping 66 percent receive dividends. The dividend tax falls hardest on retirees.
Abolishing taxes on corporate dividends is not a "tax break for the wealthy," as Sen. Tom Daschle would like voters to believe. It is tax break for the hard working Americans who built this great nation, defended us in time of war, and risked their lives in the fight for freedom. In fact, almost half of all tax savings under the dividend exclusion in 2003 will go to taxpayers 65 and older, our parents and grandparents. The average tax savings from the exclusion to taxpayers 65 and older who receive dividends is $936 per return. These are the very people that the liberals claim to want to help time and time again. But when the help involves letting taxpayers keep more of their hard-earned money, suddenly the policy is "bad."
Mr. Daschle and Rep. Nancy Pelosi are dead wrong on this issue. Just like they were wrong in the 2002 elections when they tried to scare senior voters about Social Security and about their prescription drug coverage. Their tired old political scare tactics and class-warfare rhetoric are wearing thin. They just don't ring true to voters, especially our wise seniors, anymore.
You don't have to be a rocket scientist to understand that an economic stimulus plan that provides tax relief to 92 million taxpayers at an average of $1,083 will give a lot of help to a lot of people. The math isn't fuzz; it's clear as day. Giving 13 million elderly taxpayers (and voters) an average tax cut of $1,384 will make a huge difference in people's lives, and boost our economy at the same time, promoting growth and job creation.
Rather than pull out their tired old class-warfare rhetoric, the question Mr. Daschle and Mrs. Pelosi should be asking is simple: Is the president's tax plan good for taxpayers? Is it good for the economy? Is it good for America's seniors? The answer to these questions is a resounding yes. The Bush economic stimulus plan hits the mark. And that's why in the weeks ahead we'll see senior Americans and other taxpayers overwhelmingly support Mr. Bush's economic stimulus, especially it's end to double taxation of stock dividends. My advice to Democrats is simple: reread Jack Kennedy's speeches on his massive 1960's tax cuts.

Charles W. Jarvis is chairman and CEO of United Seniors Association (www.unitedseniors.org).


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