Editorial: Stimulus package needs some work

Friday, Jan. 3, 2003 | 4:34 a.m.

WEEKEND EDITION: Jan. 5, 2003

On Tuesday President Bush will unveil his economic package, which is expected to include $300 billion in tax breaks over 10 years. The president's plan is expected to have three major components: the exclusion of a large part of an individual's dividend income from taxation, an increase in tax breaks for companies that make capital investments, and an acceleration of the tax cuts already scheduled to occur under the 10-year, $1.3 trillion legislation passed in 2001. But, according to The Washington Post, Bush is rejecting advice that he exclude the wealthiest Americans from the plan to speed up the personal income tax cuts.

As was the case with the 2001 tax cut, this long-term package won't give the economy the boost it needs. A better plan to jump-start the economy would include temporary cuts in payroll taxes, as many Democrats have argued. Not only would that be more equitable, but a cut in payroll taxes also can be implemented faster. Quickly putting money into the hands of more Americans, who in turn would spend it, would better help revive the economy now.