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American Morning

Minding Your Business: Senate Passes $350 Billion Tax Cut

Aired May 16, 2003 - 07:46   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: Late last night, the House and Senate -- well, the Senate passed their deal anyway -- about to get together right now and hash out a rather large tax cut. What does it mean for your wallet?
This guy knows.

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

HEMMER: Andy Serwer is "Minding Your Business." Good morning.

SERWER: Good morning to you guys.

FREDRICKA WHITFIELD, CNN ANCHOR: And now we're going to know.

SERWER: Yes, that's right. I've been sort of going through the numbers a little bit, parsing it out. I want to talk about that, a big victory for the president. But you're right Bill. It isn't over until it's over, because the Senate and the House do have to get together. There is a big difference in the numbers.

I want to talk about what happened, though, yesterday in the Senate, break that down for you a little bit. The dividend tax cut, of course, is where all of the action is. And you can see here, here is what the Senate has proposed. The only way to call it is gimmickry. This is a bit -- I'm having trouble saying that, but it's a gimmick -- a gimmick here.

This here (AUDIO GAP) happened in 2007. It comes back at you, OK? And that's because people are concerned about the budget deficits. This is opposed to what's going on in the House, which is a 15 percent across-the-board cut on dividends. A lot of people are saying that, you know, listen, most stocks are held by institutions anyway that don't pay any taxes. It's not going to have an impact on the stock market that much anyway.

WHITFIELD: So what does this mean when we receive our paychecks and when we prepare our taxes?

SERWER: Well, interestingly, Fredricka, people are ignoring the fact that the tax rates are really going to be coming down. And that looks like it's going to be a sure thing, because it's in both the Senate and the House versions.

Let's break that down for you here. You can see here, the rates -- and this, like I said, it matches both the Senate and the House. What I want to point out here, say you're in the 27 percent bracket right now (AUDIO GAP) at 25 percent you go down to (AUDIO GAP) you would save $1,000 on your taxes...

HEMMER: Not bad.

SERWER: ... with this new tax cut plan. And that's probably going to happen. So, that's what? Four bucks every working day. One way to look at it. I mean, $1,000 is real money that goes back into people's pockets, I think.

HEMMER: Yes, the president is saying, listen, you don't want to tax people twice, so that's why the dividend tax, he wants it to be removed anyway.

SERWER: Right.

HEMMER: That's the effort. But a lot of Americans, older Americans are the ones who would get the benefit from the dividend, and they are the ones who vote.

SERWER: That's true, absolutely.

HEMMER: And the markets were up yesterday. We'll talk about that next hour.

SERWER: OK.

HEMMER: Thank you, Andy.

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 May 16, 2003 - 07:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Late last night, the House and Senate -- well, the Senate passed their deal anyway -- about to get together right now and hash out a rather large tax cut. What does it mean for your wallet?
This guy knows.

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

HEMMER: Andy Serwer is "Minding Your Business." Good morning.

SERWER: Good morning to you guys.

FREDRICKA WHITFIELD, CNN ANCHOR: And now we're going to know.

SERWER: Yes, that's right. I've been sort of going through the numbers a little bit, parsing it out. I want to talk about that, a big victory for the president. But you're right Bill. It isn't over until it's over, because the Senate and the House do have to get together. There is a big difference in the numbers.

I want to talk about what happened, though, yesterday in the Senate, break that down for you a little bit. The dividend tax cut, of course, is where all of the action is. And you can see here, here is what the Senate has proposed. The only way to call it is gimmickry. This is a bit -- I'm having trouble saying that, but it's a gimmick -- a gimmick here.

This here (AUDIO GAP) happened in 2007. It comes back at you, OK? And that's because people are concerned about the budget deficits. This is opposed to what's going on in the House, which is a 15 percent across-the-board cut on dividends. A lot of people are saying that, you know, listen, most stocks are held by institutions anyway that don't pay any taxes. It's not going to have an impact on the stock market that much anyway.

WHITFIELD: So what does this mean when we receive our paychecks and when we prepare our taxes?

SERWER: Well, interestingly, Fredricka, people are ignoring the fact that the tax rates are really going to be coming down. And that looks like it's going to be a sure thing, because it's in both the Senate and the House versions.

Let's break that down for you here. You can see here, the rates -- and this, like I said, it matches both the Senate and the House. What I want to point out here, say you're in the 27 percent bracket right now (AUDIO GAP) at 25 percent you go down to (AUDIO GAP) you would save $1,000 on your taxes...

HEMMER: Not bad.

SERWER: ... with this new tax cut plan. And that's probably going to happen. So, that's what? Four bucks every working day. One way to look at it. I mean, $1,000 is real money that goes back into people's pockets, I think.

HEMMER: Yes, the president is saying, listen, you don't want to tax people twice, so that's why the dividend tax, he wants it to be removed anyway.

SERWER: Right.

HEMMER: That's the effort. But a lot of Americans, older Americans are the ones who would get the benefit from the dividend, and they are the ones who vote.

SERWER: That's true, absolutely.

HEMMER: And the markets were up yesterday. We'll talk about that next hour.

SERWER: OK.

HEMMER: Thank you, Andy.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.