as Ted pointed out
Jan. 8th, 2003 08:27 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
sisyphusshruggedPresident Bush's call to eliminate taxes on corporate dividends, a centerpiece of his economic plan, is raising alarm among state and local officials who say it could add to the growing budget pressures on states and cities.
Budget experts were still reviewing numbers today, but said the provision on dividends would cost state and local governments tens of millions of dollars a year in lost revenue.
The states fear they will lose in two ways. Because state income tax laws are tied to the federal law, the states will also stop taxing dividends. In addition, the removal of taxes on dividends makes stocks a more attractive investment vehicle than the traditionally tax-free municipal bonds.
Over all, the officials said the potential losses far exceed the $10 billion in state aid included in Mr. Bush's 10-year plan, much of which is earmarked to help the unemployed.
Budget experts were still reviewing numbers today, but said the provision on dividends would cost state and local governments tens of millions of dollars a year in lost revenue.
The states fear they will lose in two ways. Because state income tax laws are tied to the federal law, the states will also stop taxing dividends. In addition, the removal of taxes on dividends makes stocks a more attractive investment vehicle than the traditionally tax-free municipal bonds.
Over all, the officials said the potential losses far exceed the $10 billion in state aid included in Mr. Bush's 10-year plan, much of which is earmarked to help the unemployed.
