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News Releases on Taxes

March 21, 2003

March 21, 2003 | News Releases on Taxes

Bush Tax Plan Trumps Daschle Plan on Jobs, Economic Growth, Analysis Finds

WASHINGTON, MARCH 20, 2003-Americans can expect more jobs and greater economic growth under an economic-stimulus plan sponsored by Senate Minority Leader Thomas Daschle-but not nearly as many or as much as they would see under President Bush's plan, a new analysis from The Heritage Foundation shows.

Economists in Heritage's Center for Data Analysis found that, if Sen. Daschle's plan becomes law prior to July 1, it would create 545,000 additional jobs this year. The Bush plan, by contrast, would create 843,000 new jobs.

After that, the differences between the two plans sharpen dramatically. While the Bush plan continues to create at least 700,000 additional jobs annually through 2012, the Daschle plan leaves the job picture virtually unchanged after 2004.

The Daschle plan has an edge when it comes to economic growth, the CDA analysis shows-but only this year, when it boosts gross domestic product by $49 billion, versus $29.5 billion under the president's plan. After that, the economy grows by a significant annual margin under the Bush plan-averaging $69 billion in additional GDP each year, compared to $3.4 billion under the Daschle plan.

The difference, according to CDA analysts, stems from the fact that the Daschle plan relies mostly on targeted tax cuts for small businesses that are set to expire on October 1, 2003. After a three-month cut of $34 billion, business owners would see their taxes rise by $33 billion. The Daschle plan also proposes substantial amounts of new government spending-including tax rebates and higher state subsidies for programs such as Medicare.

More information can be found online at Heritage's "Reality Check" on taxes and by reading the CDA analysis.

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