(Washington, D.C.) – As the House and Senate mark up separate tax cut plans, the Council for Citizens Against Government Waste (CCAGW) today reiterated its call for Congress to pass President Bush’s $726 billion tax cut plan in its entirety.

During mark-up sessions this week, Congress is not expected to consider Bush’s full dividend tax cut plan, which would eliminate personal income taxes on dividends that have already been taxed as corporate earnings.  Instead, Rep. Bill Thomas (R-Calif.), Chairman of the Ways and Means Committee, and Senate Finance Committee Chairman Chuck Grassley (R-Iowa) will consider their own proposals.

“The President’s tax cut package is the robust, practical remedy necessary to revive the ailing American economy,” CCAGW President Tom Schatz said.  “It includes the full elimination of double taxation on dividends, a measure that would spur real economic growth and create new jobs.  It is imperative that Congress consider the full plan.”

Instead of the President’s plan, Rep. Thomas is considering a tax cut package of $550 billion that would include a reduction in the income tax rate on dividends and capital gains to 15 percent, or five percent in the lowest income brackets.  His package would also implement, retroactive to January 2003, the income tax rate cuts that are scheduled to be phased in by 2006.

“The House tax plan is a step in the right direction,” Schatz continued.  “However, it does not go all the way, and would fail to stimulate the economy to the full extent of the President’s package.  A provision for the complete elimination of the dividend tax needs to be included.”

In the Senate, Sen. Grassley announced he will introduce a $415 billion tax cut package, including a $91 billion plan to phase out dividend taxation by 2005.  However, dividends would once again be taxable beginning on January 1, 2006.  Grassley’s proposal includes $65 billion in as-yet-unspecified offsetting revenue increases that would keep the legislation's net cost at $350 billion.

“Double dividend taxation is inherently unfair, and it deserves to be ended permanently,” Schatz concluded.  “If members of the Senate Finance Committee and the House Ways and Means Committee are truly concerned about getting the economy moving again, they will support complete repeal.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.