FROM THE OFFICE OF PUBLIC AFFAIRS

"The tax cut is good for the economy short run, intermediate run, and long run. The longer term positive consequences of leveling the playing field between the taxation of capital and labor are potentially enormous."  Richard Vedder, Distinguished Professor of Economics, Ohio University

· "This legislation not only will provide an important boost to the U.S. economy, it moves the tax code toward greater fairness and gives taxpayers more of their own money.  The real winners are working families."  Russell Lamb, North Carolina State University

· “This bill should provide significant help in re-establishing a rate of economic growth consistent with much-needed higher levels of employment.  The modest tax relief provided in the bill will provide some help on the supply side of the U.S. economy, and additional cuts in marginal rates on income-producing activities will be even more beneficial in the long run.”  John C. Soper, Ph.D., Boler School of Business, John Carroll University

· "The just passed tax bill is very cost effective.  Americans will enjoy a higher standard of living and more job opportunities as a result of the tax package." Richard W. Rahn, Senior Fellow, Discovery Institute

· “This dividend and capital gains provisions of this law represent a significant, positive step forward in making our tax system more efficient.  By reducing the tax burden on equity financed corporate investment, we will reduce or eliminate a few of the many unhealthy economic distortions created by our complex tax code, and provide an environment that is more supportive of long-run economic growth.”  Jeffrey R. Brown, Department of Finance, University of Illinois at Urbana-Champaign
 
· “The 2003 Tax Act will benefit all Americans by improving the economy's performance in both the short and long term.”  John H. Wicks, University of Montana

· “The 2003 tax cut, while not as dramatic a reduction in the tax biases against saving as the President originally proposed, is nonetheless a step in the direction of real tax reform.  The accelerated rate cuts, the reduced taxes on interest and dividends, and the improved depreciation allowances will boost employment, productivity and wages across the board, and lift GDP in 2003 and 2004.  The next key step is to make the tax relief for capital formation permanent.”  Stephen J. Entin, President, Institute for Research on the Economics of Taxation

· “An excellent law that will improve corporate governance, reduce capital market distortions, increase the rewards to work and valuable risk taking.  Long term economic growth will be enhanced.”  Robert Tamura, John E. Walker Department of Economics, Clemson University

· “Now is the time to add a fiscal stimulus by speeding up the planned tax cuts through the Jobs and Growth Tax Relief Reconciliation Act of 2003, rather than wait for them to be slowly phased in.  Speeding up the tax cut resolves the uncertainty to whether the tax cuts will ever occur and puts much needed additional cash in taxpayer's hands.  With a reduced tax rate, we increase the ability of small and medium sized firms to hire more workers.”  Richard D. Marcus, Associate Professor, School of Business Administration, University of Wisconsin - Milwaukee

· “Cutting taxes is not only an important economic stimulus, it is an equally important stimulant for personal liberty.”  Paul J. Zak, Claremont Graduate University

· "Many of President Bush's tax cuts, such as marginal rate reduction and dividend relief, have been in the direction of fundamental reform of the tax system that will generate sustained long-term growth."  Chris Edwards, Director of Fiscal Policy, Cato Institute

· "This tax relief package will provide a solid boost to small business, the economy and job creation.  Critical pro-growth measures -- such as reducing income tax rates, cutting the capital gains tax and expanding expensing levels for small business -- will enhance incentives for investing and entrepreneurship.  That's exactly what the economy needs right now."  Raymond J. Keating, Chief Economist, Small Business Survival Committee

· “The President's tax cut makes two important contributions.  First, although the economy already shows significant improvement, the tax cuts clearly speed the recovery.  Second, it increases individuals' economic freedom by allowing them to keep a larger fraction of their earnings.”  John Rapp, Professor of Economics, University of Dayton

· “President Bush’s balanced tax relief plan will help individuals, families and business owners better spend, save, or invest more of their own earnings in a way that will unlock capital, enhance economic activity, and foster job creation.”  Paul G. Merski, Chief Economist & Director of Federal Tax Policy, Independent Community Bankers of America

· “I strongly support the Jobs and Growth Tax Relief Reconciliation Act of 2003.  The Act will increase the after-tax income and cash flow of both consumers and investors, leading to greater job growth through increased consumer spending and capital accumulation.”  Craig A. Stephenson, Ph.D., Babson College

· “The passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003 represents significant tax reform by sharply reducing the double taxation of dividends.  In addition, by accelerating previously enacted income tax cuts, the act should provide significant stimulus to economic growth over the next two years.  When combined with the original tax cut passed in 2001, the act provides the most significant rollback in tax rates since the Reagan tax cuts.”  John Ryding, Bear Stearns

· “The Bush Administration tax cut increases household disposable income, raises the after-tax returns on equity and provides incentives for business investment.  Whether you rely on a demand-driven model of the economy or one that is supply-driven, the economic impact of this package is clear:  it will boost growth and create jobs.”  Mickey D. Levy, Chief Economist, Bank of America

· “Cuts in dividend and capital gains taxes will stimulate investment and grow the economy.  The nation should be grateful that President Bush has persevered on this issue.”  John Semmens, Phoenix College

· "The combination of the income tax cut and the stimulants for capital investment bode well for economic growth in our country.  As people spend and businesses invest, demand for goods and services will increase, ultimately creating jobs for Americans."  Dr. Rebecca A. Thacker, Ohio University

· “In the short-term, this act will stimulate the economy by providing immediate tax relief for millions of Americans.  Over the long-term, it enhances economic growth by encouraging business investment and improves economic efficiency by reducing the taxation of dividends and capital gains.”  William Walstad, Professor of Economics, University of Nebraska-Lincoln Lincoln

· "Timely medicine to strengthen a struggling economy with tax relief for overburdened taxpayers and investment incentives to spur growth and create jobs.  And a good step toward long-run tax reform, to boot."  Dr. Michael J. Boskin, T.M. Friedman Professor of Economics and Hoover Institution Senior Fellow, Stanford University, former Chairman of the President's Council of Economic Advisers

· “The Jobs and Growth Tax Relief Reconciliation Act of 2003 is another positive step forward for taxpayers.  Much more work remains to be done, but this legislation marks provides both qualitative and quantitative improvements in our federal tax system.”  John Berthoud, Ph.D., President, National Taxpayers Union, Adjunct Lecturer, George Washington University

· “I believe the new Jobs and Growth Tax Relief law and continued easy money will do just that; create more jobs and growth, beginning in the last half of this year and through 2004.  President Bush and the Congress are to be congratulated on their achievement.”  Dr. Beryl Wayne Sprinkel, President, B.W. Sprinkel Economics.

· “While the economy has been growing, it can and should grow faster. This bill sets the stage for sustained economic growth. It is a down payment on a long-overdue restructuring of our tax code.”  Charles Upton, Department of Economics, Kent State University

· “The President's tax cut, although less than he wanted, will still lead to an improved U.S. stock market and an improved economy.  By increasing the incentive to produce goods and services it will lead to greater employment and wealth for all Americans, but will primarily benefit the working class.”  Dr. Gary Wolfram, George Munson Professor of Political Economy, Hillsdale College

· “Cutting tax rates on dividends, on capital gains, and on income earners is not ‘trickle-down economics.’  It is gush-down economics.  Virtually every working American will gain from the new incentives to invest and work.”  David R. Henderson, Research Fellow, Hoover Institution

· “President Bush's Tax Relief plan will help to create the incentives needed to boost the economy's growth rate.  The fundamentals of our economy are strong and the economy is poised to grow at a healthy 3 to 4% per year under the leadership of a President who understands that the economy is composed of individuals who want to be productive and to be fairly rewarded for their effort.  The improving consumer confidence figures of the last few days bears out the readiness of the economy to respond to this stimulus package now.”  Sherry Jarrell, Asst Professor of Finance and Economics, Wake Forest University

· “The new tax bill is a solid boost to the economy’s long-term growth potential, and its effects will start to be felt immediately. At the same time, it’s a down-payment on fundamental and much-needed reform of the tax-code.”  Donald L. Luskin, Chief Investment Officer, Trend Macrolytics

· “The President’s jobs & growth package is the best elixir for the economy’s ills. This package will place money into the hands of consumers than spend, and back into the businesses and corporations that are responsible for hiring workers and investing in new projects and equipment. There’s even relief for investors, particularly those that depend on dividend-yielding securities. And rightfully so, as these are the entities that are suffering the most.”  Richard Yamarone, Director of Economic Research, Argus Research Corp.

· “Any tax relief on the double taxation of common stock dividends is more than welcome.  Previous double taxation of dividends has favored debt usage by firms over issuing equity.  As a result, it has encouraged firms to use more debt than otherwise, thereby increasing bankruptcy risk among American businesses.  Also, double taxation has caused firms to cut back on dividends.  More and more firms do not pay any dividends today.  As a result, for investors at least, dividends are not useful in valuing many firms.  And, many investors must take the risk of making large capital gains on their investments.  With less taxation of dividends, risk-averse investors will find that buying common stocks is more attractive than otherwise.  Risk-averse investors like dividends, as they are returns paid now rather than hopefully paid later in the form of capital gains.  With huge declines in stock prices in recent years, investors are scared of buying stocks.  Dividends will reduce investors' fears of stocks, as they can get returns paid out faster than if they had to rely almost entirely on capital gains.  With more investors returning to the stock market, stock prices can be expected to be benefit from the greater demand.  Thus, this change in tax policy should benefit firms, investors, and economy in general.”  James W. Kolari, Chase Professor of Finance, Texas A&M University