Heritage Foundation Leadership for America

As for the tax cut, [Sen. John Breaux] said he can't support a measure that would add so much to the growing federal deficit, with its major component, dividend tax elimination, benefiting only 8 percent of Louisiana taxpayers.
-- The New Orleans Times-Picayune, March 6, 2003

"They should be ashamed to come here asking for tax reform under the cover of stimulus. No one believes the relief of taxes on dividends will stimulate the economy or the estate tax will stimulate the economy. Those with estates and those with dividends, Bill Gates and several other witnesses, have said that is the wrong course to take. They know it. I know it. You know it."
--Sen. Fritz Hollings, Congressional Record S.Con.Res 23, FY 2004 Budget Resolution, March 19, 2003

Compared with the Bush plan over the next five years, the Senate's proposal will have the following result:

• Reduce GDP $40 billion per year;
• Shrink job creation by 552,000 jobs per year;
• Reduce capital investment by $45 billion per year; and
• Reduce disposable income by $224 per person.

The Heritage Foundation's Center for Data Analysis used the DRI/WEFA U.S. macro econometric model to simulate the differences between the two proposals. The Senate version does not simulate any dividend taxation reform.