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American Morning
Can President's Plan Help Jumpstart Economy?
Aired January 06, 2003 - 08:18 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: I want to shift our attention right now. A big day at the White House, especially tomorrow when the president heads to Chicago, getting ready to unveil a $600 billion economic stimulus package on Tuesday. That plan including tax cuts and write-offs for businesses.
But can the plan help jump start the economy? That is the ultimate question.
Andy Serwer is here for a look at that this morning.
Good to see you, Drew.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning.
HEMMER: Happy '03 to you.
SERWER: Yes.
HEMMER: So how does it shake down right now based on what we know and do not know?
SERWER: That's actually a very important point you just made, because it's what we know right now, it's not tomorrow yet in terms of actually getting into the fine details. People have to understand, this is still being hashed out right now.
What we do know, though, is the president has greatly increased the tax cut for dividends. Before he was going to cut it by half. Now it looks like all taxes on dividends will be out, according to his plan. Also, accelerating tax cuts that were supposed to come into play later in the decade to next year and then also a parent tax cut that he wants to put into play, as well.
HEMMER: Based on what we know, then, who is helped, who is hurt, who benefits and who doesn't?
SERWER: Let's focus on the dividend cut, because that is the biggie and that's really the centerpiece of the plan. I want to take a look at some wage earners here. These are some lower wage earners, less than $50,000 and $50,000 to $100,000, OK? You can see there that there are 15 million tax returns in the first category, 10 in the second. You can see billions, tens of billions of dollars of potential savings going back into the pockets of American taxpayers. Focus on that middle column and see how many people that is, 15 million and 10 million. Let's go to the next screen where we see some higher wage earners. You can see, they get about the same amount of savings going back into their pockets. That's the last column. But there are far fewer of them, only 4.8 million in the first category, 200,000 are the ones who make over a million dollars.
This is where the Democrats start to say that it benefits the rich more than the poor. But Republicans counter that. Republican Senator Rick Santorum saying 37 percent of all Americans don't pay taxes. So it makes sense to give tax relief to the Americans who actually pay taxes, which are wealthier Americans.
HEMMER: We'll see the president's plan tomorrow, as we mentioned.
SERWER: Yes.
HEMMER: The Democrats are going to unveil their plan a bit later today.
Meanwhile, on the Andy economator (ph)...
SERWER: Yes?
HEMMER: What do you gauge right now in terms of what is really hot in terms of tax cuts?
SERWER: Let's talk about that. OK, I think that the dividend tax cut is actually a positive. I'm saying that's getting warm. I'm not giving that a red hot, but I'm saying that's a good thing, putting money back into the economy quickly to Americans. Then we'll go over to the second one. That has to do with accelerating -- I'm not so sure that's such a big deal because it's already in the system, as it were.
Then let's go to the fourth one, which has to do with parents and the tax cut. I like that one a lot because it's actually helping out Americans save for college. Investing in education, that's a getting warmer for me. It is very, very important and proves out down the road.
HEMMER: Yes, and there's a big part of that in this tax, or apparently in this stimulus package, as well.
SERWER: That's right.
HEMMER: A (UNINTELLIGIBLE) education supplement.
SERWER: That's right.
HEMMER: Thanks again.
We're getting it from Democrats today?
SERWER: Yes.
HEMMER: Republicans tomorrow?
SERWER: We're going to hear -- and they're going to criticize it. I happen to actually think that the president upped the ante here as a bargaining mechanism, because if he stayed down here, the Democrats would be attacking it. If he asks for a whole lot, then when he retreats to a position that he originally wanted anyway, I think.
HEMMER: OK, thank you, Andy.
We'll watch it.
Good to see you.
SERWER: Good to see you.
HEMMER: See you again in about 20 minutes.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 6, 2003 - 08:18 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: I want to shift our attention right now. A big day at the White House, especially tomorrow when the president heads to Chicago, getting ready to unveil a $600 billion economic stimulus package on Tuesday. That plan including tax cuts and write-offs for businesses.
But can the plan help jump start the economy? That is the ultimate question.
Andy Serwer is here for a look at that this morning.
Good to see you, Drew.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning.
HEMMER: Happy '03 to you.
SERWER: Yes.
HEMMER: So how does it shake down right now based on what we know and do not know?
SERWER: That's actually a very important point you just made, because it's what we know right now, it's not tomorrow yet in terms of actually getting into the fine details. People have to understand, this is still being hashed out right now.
What we do know, though, is the president has greatly increased the tax cut for dividends. Before he was going to cut it by half. Now it looks like all taxes on dividends will be out, according to his plan. Also, accelerating tax cuts that were supposed to come into play later in the decade to next year and then also a parent tax cut that he wants to put into play, as well.
HEMMER: Based on what we know, then, who is helped, who is hurt, who benefits and who doesn't?
SERWER: Let's focus on the dividend cut, because that is the biggie and that's really the centerpiece of the plan. I want to take a look at some wage earners here. These are some lower wage earners, less than $50,000 and $50,000 to $100,000, OK? You can see there that there are 15 million tax returns in the first category, 10 in the second. You can see billions, tens of billions of dollars of potential savings going back into the pockets of American taxpayers. Focus on that middle column and see how many people that is, 15 million and 10 million. Let's go to the next screen where we see some higher wage earners. You can see, they get about the same amount of savings going back into their pockets. That's the last column. But there are far fewer of them, only 4.8 million in the first category, 200,000 are the ones who make over a million dollars.
This is where the Democrats start to say that it benefits the rich more than the poor. But Republicans counter that. Republican Senator Rick Santorum saying 37 percent of all Americans don't pay taxes. So it makes sense to give tax relief to the Americans who actually pay taxes, which are wealthier Americans.
HEMMER: We'll see the president's plan tomorrow, as we mentioned.
SERWER: Yes.
HEMMER: The Democrats are going to unveil their plan a bit later today.
Meanwhile, on the Andy economator (ph)...
SERWER: Yes?
HEMMER: What do you gauge right now in terms of what is really hot in terms of tax cuts?
SERWER: Let's talk about that. OK, I think that the dividend tax cut is actually a positive. I'm saying that's getting warm. I'm not giving that a red hot, but I'm saying that's a good thing, putting money back into the economy quickly to Americans. Then we'll go over to the second one. That has to do with accelerating -- I'm not so sure that's such a big deal because it's already in the system, as it were.
Then let's go to the fourth one, which has to do with parents and the tax cut. I like that one a lot because it's actually helping out Americans save for college. Investing in education, that's a getting warmer for me. It is very, very important and proves out down the road.
HEMMER: Yes, and there's a big part of that in this tax, or apparently in this stimulus package, as well.
SERWER: That's right.
HEMMER: A (UNINTELLIGIBLE) education supplement.
SERWER: That's right.
HEMMER: Thanks again.
We're getting it from Democrats today?
SERWER: Yes.
HEMMER: Republicans tomorrow?
SERWER: We're going to hear -- and they're going to criticize it. I happen to actually think that the president upped the ante here as a bargaining mechanism, because if he stayed down here, the Democrats would be attacking it. If he asks for a whole lot, then when he retreats to a position that he originally wanted anyway, I think.
HEMMER: OK, thank you, Andy.
We'll watch it.
Good to see you.
SERWER: Good to see you.
HEMMER: See you again in about 20 minutes.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
