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News Releases on Taxes

April 16, 2003

April 16, 2003 | News Releases on Taxes

Ohioans Can Expect Fewer New Jobs Under Voinovich Deal, Analyst Says

WASHINGTON, APRIL 16, 2003-Sen. George Voinovich's pledge to block tax cuts totaling more than $350 billion could cost Ohioans almost 23,000 jobs annually over the next five years, according to calculations made by The Heritage Foundation's Center for Data Analysis (CDA).

Voinovich insists that President Bush's 10-year, $726 billion tax-cut proposal should be cut by more than half. A CDA econometric analysis of the Bush proposal shows that it would create, on average, almost 37,700 jobs annually in Ohio over the next five years. And it would produce results almost immediately, generating 41,000 jobs next year.

However, CDA found, the smaller tax cuts proposed by Sen. Voinovich-which would leave the "double taxation" of dividends intact-would create far fewer new jobs. The Voinovich approach would yield only about 18,500 new jobs in Ohio next year and create, on average, almost 15,000 annually over the next five years, says Heritage analyst Rea Hederman.

Ohio wouldn't be alone. The impact of the Voinovich deal would be felt nationwide. The tax cut he's contemplating would lead to 449,000 more jobs in 2004, CDA has found. That's less than half the number that would be realized under the Bush plan: 997,000. And the differences only widen each year through 2008. By that year, the Voinovich deal generates 226,000 new jobs. The Bush version more than triples that amount, with 778,000 jobs created.

The contrast, says Hederman, isn't merely a result of size. "The president's tax cut outperforms the one envisioned by Sen. Voinovich not simply because it's larger, but because it includes certain features, such as ending the double taxation of dividends, that are designed to change taxpayer behavior in a way that helps the economy," he says. "Under the Bush tax cut, Americans not only would see their incomes rise, they'd receive greater incentives to save, spend and invest their money productively."

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