James Sensenbrenner, Jan. 8, 2003

Many of us make plans at the start of every calendar year to make this year a better one than the last. On January 7th in Chicago, with the release of his growth and jobs plan, President Bush shared with us his plan to make this year a better one than the last for our nation.

The President’s plan has three main goals to strengthen the American economy: it encourages consumer spending in an effort to continue boosting the economy; it promotes investment by individuals and businesses to help the economy grow and create jobs; and it delivers critical assistance to unemployed citizens.

Under the President’s plan, everyone who pays federal income taxes will benefit because tax rate reductions passed by Congress in 2001 would be made effective immediately. His plan would raise the child tax credit from $600 to $1000 per child this year instead of waiting until 2010. This $400 increase would be issued to parents this year, and in Wisconsin, based on the number of income tax returns filed in 2001, this would help at least 510,000 people. The plan would also reduce the marriage tax penalty this year instead of 2009, which would help more than 754,000 people in Wisconsin.

People who invest in the stock market and receive dividends -- many of whom are senior citizens -- will benefit from the elimination of the double taxation on dividends. This occurs because the Internal Revenue Service (IRS) taxes a company’s profits, as well as the investors who receive the profits as dividends. The result is that for every dollar of profit a company could pay out in dividends, sometimes, as little as 40 cents can actually reach the shareholders. By eliminating this unfair dual tax on the individual, the President’s plan would allow shareholders to keep their profit, which in turn would benefit many seniors since almost half of all savings from this dividend exclusion would go to taxpayers 65 and older.

A new concept in the President’s plan to help unemployed citizens is the introduction of the Personal Re-employment Account. Under this economic plan, unemployed individuals looking for jobs would receive funds of up to $3,000 to help them with job training and other key services. If the recipient becomes re-employed within 13 weeks, he or she would be allowed to keep the balance of the funds as a cash re-employment bonus. So, in other words, the quicker the recipient finds a job, the more money he or she will have to keep as a bonus.

In addition to individual taxpayers, the President’s plan also helps small business owners -- who create the majority of new jobs and account for half the output of the economy. His plan increases from $25,000 to $75,000 (indexed to inflation) the amount small businesses can deduct for expenses, which would encourage them to buy the items and services they might need to expand, and consequently, hire more people.

The President’s plan is a good one. It provides incentives to help Americans get back to work, which will reduce the number of people on unemployment. It puts more money in people’s pockets because it lets them decide how to spend their money, instead of having the federal government do so. And given our work ethic, I know many of my constituents in Wisconsin feel the same way. So, although his plan doesn’t include everything I would have liked to see in it, I give the President an A- for his proposal.

James Sensenbrenner, Jr., is a Republican Member of Congress representing the Fifth Congressional District of Wisconsin.