Pro-growth tax cut reflects the importance of the new investor class majority to America\’s economy
WASHINGTON – American Shareholders Association (ASA) praises the House of Representatives for passing H.R. 2, the Jobs and Growth Reconciliation Tax Act, which provides the largest investor tax cut in American history and addresses the most fundamental problems in the U.S. economy. The proposal accelerates scheduled income tax rate reductions, allows for greater small business expensing, and provides 50 percent depreciation for businesses to write off equipment. Most importantly, however, this legislation significantly reduces the double taxation of dividends, equalizes dividends with capital gains taxation to remove distortions, and then slashes both capital gains and dividends to 15 percent.
"Today, the House of Representatives passed one of the most significant tax cuts in the history of America," said ASA Executive Director Daniel Clifton. "While the size of the tax cut is relatively small compared with other tax cuts, H.R. 2 is structured properly to get the largest economic bang for the buck. Slashing excessively high rates of capital taxation on income, investments, and business purchasing, as the House bill does, removes barriers to investment for families, investors, small businesses, and large corporations."
In addition to the economic effects, the legislation is also symbolic by reflecting the growing American investor class and their importance to the U.S. economy. Growth in the number of investors in America has become one of the great economic and demographic transformations in America. Since 1983, the number of investors has increased 231 percent and this growth of investors has been spread evenly across income and demographic groups. In fact, since 1995, stock ownership in the bottom income quintile has increased 91 percent. As such, 52 percent of American families now own stock and 70 percent of voters in the 2002 elections were investors. With more people and money invested in the market, the stock market has become increasingly more important to the U.S. economy.
"The days of the Rockefellers and Kennedys being the stock owners in the country are long over. The new investor class majority are middle-class working Americans who have waited patiently for Congress to remove the discriminatory government taxation which has reduced the rate of return on their investments," continued Clifton. "Since March of 2000, the stock market has lost $7 trillion of net worth and this plan is the first step towards replenishing those losses. Never has there been a more perfect time to take action and get this economy moving again."