- The Washington Times - Thursday, January 9, 2003

WASHINGTON, Jan. 9 (UPI) — President George W. Bush took his controversial $674 billion economic package proposal on the road Thursday, visiting a Virginia flag-manufacturing company to trumpet how the proposal's provisions to accelerate earlier tax cuts and end taxation of stock dividends would benefit ordinary Americans.

The cuts, which would be applied retroactively, were real and significant, he said. If tax cuts passed in 2001 for future phasing in (in 2006 and 2008) were good enough then, they were good enough for accelerated implementation now, he said.

"You hear a lot of talk in Washington, of course, about, you know, 'This benefits so-and-so,' or 'This benefits this' — the — kind of the class warfare of politics," Bush said at the National Capital Flag Company, in Alexandria, Va.

He said all those who paid taxes should get relief.

"The tax relief is already in place. If tax relief is good enough three years from now for the American people, given the circumstances today, it's good enough today," he said. "The Congress needs to hear that."

Major provisions of Bush's plan call for the accelerated cuts — including a break for married couples and a $400 per child tax credit — an end to taxation on stock dividends, a widening of the 10 percent tax bracket, an inflation-indexed increase from $25,000 to $75,000 for business equipment investment write off and a special employment financing package for job seekers.

Democrats and others have complained it provides little or no immediate stimulus to the sluggish economy, favors the wealthy and will increase the federal deficit.

The administration, following the mantra of the trickle-down economics proposals of the Reagan administration in the 1980s, argues the tax write offs for businesses will spur investment, and thus jobs, while tax breaks for individuals will spur spending on goods and services, creating a demand for more.

Attending a roundtable with a number of citizens at the flag company Thursday, Bush noted how the end of taxation of dividends would help people such as Donald Lucas, a retired analyst who earns each year about $5,000 in taxable dividends. Lucas' tax relief under the proposal would be $1,800 annually, including $1,300 from the ending of taxes on dividends, the White House said.

Joseph and Kristen Pappano, with two children and combined earnings of $75,000, would see an 18 percent cut in taxes, while businessman Albert Ulmer would be able to write off two new $21,000 embroidery machines.

"Let me just give you the facts; that under this plan, a family of four, with an income of $40,000, will receive a 96 percent reduction in federal income taxes," Bush said. "Now, that may not mean a lot of money to some of the big shots; it means a lot of money for the family of four making $40,000.

"The income taxes would drop from $1,178 a year to $45 a year. That's real significant money for this family. It's money that family would have to save, invest, to help with the credit card squeeze. It's money that the family would have to make decisions on their behalf."

The White House said Bush plans other appearances to banner his economic package, which is expected to come in for a bruising on Capitol Hill.

Bush on Wednesday met with congressional leaders from both parties in what the White House called a 'bridge building" outreach to advance his legislative agenda for the year.

"If you recall what happened in 2001, the Democrats did not support it (the tax relief package) at the beginning, either; they supported it at the end," White House spokesman Ari Fleischer said Thursday. "The 12 Democrats who voted for it in the Senate, when the president announced it, they didn't come out for it, but they emerged there toward the end."

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