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Dividend Cut Included In GOP Senate Legislation

Tuesday, May 6, 2003 - 1:45AM

Republican tax writers in the Senate included a dividend tax cut in the first draft of their legislation, putting it a step closer to President Bush's outline for economic growth. Bush welcomed what he called "some progress" in Congress but argued for more.
The elimination of taxes on stock dividends has run into serious opposition in the Republican-controlled Senate. Some Republicans wanted to phase in such a break or place limits on it. In response, Finance Committee Chairman Charles Grassley, R-Iowa, inserted a three-year version of the president's tax proposal to eliminate dividend taxes into his bill as a placeholder. In Grassley's version, taxes on dividends are eliminated for one year in 2005 and the tax is reduced in 2003 and 2004 at a cost of $90 billion. Republicans will have until Thursday's committee debate to rewrite the idea to make it fit in their $350 billion tax cut. Click here for the Joint Committee on Taxation’s description of the Senate Finance Committee’s version of the package. 
To learn more about how this proposal could impact the low-income housing tax credit (LIHTC) program, click here.

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