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NPES Urges Congress To Eliminate Double Taxation Of Dividends And Full Expensing

Press release from the issuing company

"The elimination of the double taxation on dividends for millions of American stockholders will be of enormous benefit in driving much needed capital investment now, in addition to being good solid tax policy for the long-term growth of the economy," stated NPES President Regis J. Delmontagne. This fundamental improvement to the U. S. tax code, along with the other provisions of President George W. Bush’s economic recovery and growth plan, is strongly supported by NPES The Association for Suppliers of Printing, Publishing and Converting Technologies. Recently, NPES Government Affairs Director Mark Nuzzaco and other business and association leaders met with new Treasury Secretary John Snow, and commended the President’s leadership and the Secretary’s advocacy in advancing the Administration’s proposals designed to accelerate economic growth and benefit every American. In his remarks, Snow emphasized that ending the double taxation of dividends would strengthen the economy by creating more jobs, providing higher wages, affording tax relief to investors, increasing the value of the stock market, and creating more equity capital for investment in the manufacturing sector. By various estimates, the President’s plan would boost the U.S. gross domestic product by as much as 2.4 percent by the end of 2004, adding an average of 1.8 million new jobs in each of the next two years and an average of 1.2 million new jobs per year for the next five years. Continuing to comment on the dividend component of the President’s proposal, Delmontagne further stated " although it was not well understood at first, as time goes by support for it is building as people come to appreciate the wide-spread ramifications it has for the entire economy, and the manufacturing sector in particular." Nuzzaco pointed out that even critics of President Bush’s plan have acknowledged the critical contribution dividends have made to the stock market’s long-term performance, citing one analysis that fully two-thirds of the market’s historical average real annual return of 7 percent is accounted for by reinvested dividends. With regard to the manufacturing sector, NPES Government Affairs Committee Chairman H.A. Brandtjen III, President, Brandtjen & Kluge, Inc., St. Croix Falls, WI emphasized the important multiplier effect that the dividends piece will have on his company’s ability to sell new equipment, and on the personal financial well being of his employees. "Many manufacturing employees’ personal investments, not to mention their 401(k) plans and retirement accounts will benefit by increased stock values," Brandtjen stated. "But even more immediately relevant to these workers is that our customers, with increased equity capital, will be able to more readily afford to buy our products, thus preserving our company’s good paying jobs upon which our company’s employees and their families depend," he stressed. In addition to supporting the President’s economic plan, NPES also commended Representative Phil English (R-PA) for introducing H.R. 683 which would increase from thirty percent to one hundred percent the special allowance for depreciation for capital goods acquired after December 31, 2002 and before January 1, 2006. Congressman Jerry Weller (R-IL) has also offered legislation enhancing first-year depreciation. Between the two proposals, over one hundred House members have cosponsored the concept. Delmontagne praised both English and Weller for their leadership in offering their bills, saying " they will provide a critical window for all businesses to expense the cost of buying the technology and machinery needed to revive the manufacturing sector of the economy and bring back high-paying jobs to America. The power of combining full expensing for capital investment with elimination of the double taxation of dividends is just what the economy needs," he concluded.