Fact of the Day #2

WASHINGTON – In 2003 President Bush signed into law the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA). The legislation reduced the capital gains tax rate by 25 percent and substantially reduced the double tax placed on dividends. The purpose of these two provisions was more than just a lower tax burden for investors, but also to increase equity values and boost dividend income. The 2003 tax cut has been an unmitigated success and should be extended.

Since the tax cuts’ passage, unemployment has steadily declined. CBO expected the average unemployment rate to be 6.2 percent in both 2003 and 2004. However, the unemployment rate finished more than 20 basis points below CBO’s forecast in 2003 and 60 basis points in 2004. Since the tax cut, 4.7 million jobs have been created.

Congress needs to extend the lower tax rates on dividends and capital gains.

Unemployment drops following tax cuts