President George W. Bush recently unveiled his new economic stimulus plan to help boost the economy, which has been in a recession ever since the end of the Clinton presidency.
The Clinton presidency lacked an energy policy, and its anti-trust suit against Microsoft started the NASDAQ landslide to 70 percent of its value. This was further complicated by the events of September 11, 2001.
This is Bush’s second round of tax cuts. Part of the new plan is to accelerate what was done in the old plan. But one new idea in the recent plan is to cut the taxes on dividends. Of course all of this is met by what should be called the Democrats’ trademark statements: “tax cuts for the rich” or “only helps the top 1 percent,” which are really just a bunch of fluff. The fact is that anytime you take away or alleviate a restriction in the economy, everyone will benefit.
In the beginning, those who actually pay taxes will not have to pay as much the next year, so they will see an immediate relief. But now that they will have more money, they will have to do something with it. They will either buy goods or invest that money in the hope that it will grow.
If they buy goods, then companies will sell more. If they invest that money, companies will have more money at their disposal. Either way, that money will go to make products more efficiently, bringing prices down — this means you, the “average” American, will save more — or raise wages or hire more workers to meet the growing demand, so they can compete with other companies.
Another area where these higher revenues will go is back to investors in the form of dividends. Currently, this avenue isn’t used to the fullest extent because those who go for dividends are double taxed and don’t get to keep much of what they gain. For example, my grandfather has been investing in the stock market for the last 40 years. Before he went into a life of retirement, he was a career enlisted man in the U.S. Navy. He then repaired farm machines — you know, blue-collar work — for 15 years after that, hardly what you would consider part of the upper class and definitely not the “top 1 percent.” Yet, over this Christmas break, he was telling me about how he is going to have to dump some of his high dividend stocks because Uncle Sam takes it all every time dividends are paid out.
Yet many on the left say that this is just going to aid the rich. But they are dead wrong; it will help everyone out there who takes advantage of investing in the stock market. Many stocks that have a decent dividend don’t actually fluctuate that much; they stay at a constant price.
Many seniors would definitely benefit from such a tax cut. Especially those who live in retirement now, the ones who come to the Sunshine State for the winter and spend thousands of dollars as tourists in this state every year.
If more money is available for them to spend here, Tallahassee will collect more in sales taxes that would help alleviate the current, and definitely the future, budget problems of this state.
Alex Hardman is a senior majoring in electrical engineering.