Press Room
 

To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®.

March 14, 2006
JS-4116

Treasury Hosts Tax Relief Symposium
“Investing in America’s Future – Preserving the
Lower Tax Rates on Capital Gains and
Dividends”

Washington, DC– Treasury Secretary John Snow welcomed a distinguished panel of guests to Treasury's historic Cash Room this morning for an event that emphasized the importance of maintaining lower tax rates on capital gains and dividends in order to sustain U.S. economic strength.

Secretary Snow highlighted the economic impact of lower rates on investment capital by pointing out the dramatic economic turnaround that occurred after the enactment of the Jobs and Growth Act in May of 2003. "While officially the recession had ended in late 2001, the pace of the recovery was too slow. Growth was anemic, business confidence low and -- of critical importance -- capital investment was way down. As a result job growth was nonexistent," Snow explained.

"President Bush recognized that something needed to be done; a more favorable climate was needed to encourage capital investment and spur job growth. With the enactment of the Jobs and Growth Act of 2003, the U.S. economy made a remarkable turn-around. From capital investment suffering nine consecutive months of decline, businesses took advantage of the much-needed incentives and almost overnight began investing more.  And since that time, almost five million new jobs have been created.

Today we have brought together a remarkable group of experts that work both in and out the Administration to discuss how sound tax policy leads to a strong economy.  It is our intent that the discussions here today will encourage members of Congress to move forward in making the President's tax relief permanent."

Public-Private Experts

The event brought together a renowned group of experts.

  • Council of Economic Advisors Chairman Edward Lazear provided remarks on "Capital Taxation and Economic Growth;"  
  • Treasury Deputy Assistant Secretary for Tax Analysis Robert Carroll led a panel discussion on the "Economics of Dividend and Capital Gains Taxation." The panel included MIT Professor of Economics Dr. James Poterba, President of the Institute for Research on the Economics of Taxation Stephen Entin and Director of Economic Policy Studies for the American Enterprise Institute Kevin A. Hassett;
  • President of the Tax Foundation Scott A. Hodge spoke on "Putting A Face on the American Taxpayer;"
  • Former CEA Chair for President Reagan and current Harvard professor of economics and President of the National Bureau of Economic Research Dr. Martin Feldstein addressed the group on the "Distorting Effects of Capital Taxes;" and
  • Treasury Assistant Secretary for Economic Policy Mark Warshawsky closed the event with remarks on the current state of the economy.   

Economics-Tax Report

As a final cap, the symposium marked the release of a Department of Treasury report entitled "The Economic Effects of Cutting Dividend and Capital Gains Taxes in 2003."  The report examines the economic rationale for reducing the double tax on corporate profits and identifies initial evidence on the economic effects.   Specifically, the report expands on three determinations:

  1. Reducing the tax rate on capital gains and dividends promotes economic growth and takes an important significant step toward removing taxes from important economic decisions;
  2. The economy has performed strongly in the months since the passage of the 2003 Jobs and Growth Act; and
  3. The tax relief provided over the past several years has increased employment substantially above what would have occurred otherwise. 

Visit www.treasury.gov to download the complete Treasury report as well as other materials handed out during the symposium.

 

 

 

 

LINKS

REPORTS