A dissenting voice
A reform but not a stimulus
"Sadly, Mr. Bush's claims are not convincing. The notion that a tax plan's ten-year price-tag provides any measure of its efficacy as a short-term stimulus is absurd. The central component of Mr. Bush's tax plan—the elimination of dividend taxation—would improve the tax code and, probably, long-term growth, but it would do little to boost the economy now. Mr. Bush's people say that ending dividend taxation would raise share prices, which in turn would boost spending. Most economists reply that the boost to share prices would be fairly undramatic (a 5-15% jump is the consensus guess); and any effect on spending would be small and gradual." (The Economist, May 10, 2003, pg. 26).


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