• Dramatic Dividend Exclusion Proposed by President Bush
  • May 15, 2003
  • Law Firm: Dechert LLP - Office
  • President Bush's economic stimulus plan released on January 7, 2003, provides for $674 billion in tax cuts over the next 10 years. In addition to the now widely publicized dividend exclusion for individual shareholders, the plan includes other tax cuts aimed at individuals and small business. The plan would accelerate to January 1, 2003, tax cuts currently scheduled to be phased in over time, including the reduction in marginal individual tax rates, the elimination of the so-called "marriage penalty," an increase in the range of income subject to the lower 10% tax bracket, and an increased child tax credit. The plan would also increase the Alternative Minimum Tax ("AMT") exemption amount for individuals, thereby reducing the likelihood that typical taxpayers will become subject to AMT. In addition, small business would be able to deduct triple (subject to phase-out) the amount spent when purchasing qualifying depreciable property under the plan. This update focuses on the dividend exclusion proposal.