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Ways to Boost the Economy

May 24, 2003

Greg Givens (letter, May 17) laments the liberal "canard" that "the poor and not the so-called rich will stimulate the economy if given tax relief." He exposes the canard by pointing out that he has never been hired by a poor person.

As a business owner, I do not hire people based on the fact that I've freed up cash flow by paying fewer taxes. I hire people based on an increase in demand for my goods and services. Unless you're a yacht salesman, that demand is probably being driven by consumers who are not rich.

Absent an increase in demand, I will spend that extra cash flow on consumption rather than investment (unless I decide to save it). Consumption generates demand, which generates jobs. Wouldn't it be better for our country in the long run if that consumption were represented by lower-income people consuming things like health insurance, rather than higher-income people consuming things like extra trips to Maui?

Tom DeLuca

Manhattan Beach

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If Republicans in Congress were really concerned with eliminating the "unfairness" of the so-called "double taxation" of corporate dividends, they would only have to enact a dividends-paid deduction in determining a corporation's taxable income.

The fact that elimination of income tax on dividend income disproportionately benefits the wealthy (since nonwealthy individuals either don't own stock or hold most of what stock they do own in 401(k)s and other tax-advantaged savings accounts) should give us a clue as to the Republicans' real motivation.

Michael A. James

Studio City

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Why does nobody mention the "double taxation" of Social Security payments? All right, so the gains of a stock are taxed before the dividend is determined and paid, and I have to pay taxes on the dividend income. So what?

I paid taxes on my income before I added part of it to Social Security, and now I have to pay taxes on a good part of my Social Security income again. Sure, I have other additional sources of income because I was smart enough to save and invest, but should I be punished for that by having to pay taxes again on Social Security?

Whom does President Bush favor by eliminating taxes on dividends? He should eliminate taxes on Social Security first. I promise to use that tax reduction to stimulate the economy.

Hilda S. Rollman-Branch

Pacific Palisades

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