Democrat Presidential Hopeful Sets Out Economic Recovery Package

by Mike Godfrey, Tax-News.com, New York

22 October 2002

Senator Joseph Lieberman, who was Al Gore's Democratic vice presidential candidate in 2000, has called in a speech at the NASDAQ market site for tax incentives to stimulate the US economy by sparking investment and growth in high-tech industries.

Lieberman criticised George Bush for ignoring the economy while tackling Saddam Hussein: 'The American people elect, and expect, their presidents to help them deal with more than one problem at a time. FDR didn't put the recovery from the Depression on the backburner when World War II demanded his leadership. JFK didn't choose between containing Communism and sparking one of America's biggest economic booms.'

The Connecticut senator, who may offer himself as the next Democrat presidential candidate, said the nation must revitalize business investment because its decline "is the major cause of our economic troubles today."

Lieberman prescriptions include an investment tax credit:

'I propose enacting an immediate Investment Tax Credit for business acquisition of information technology, the key to sparking productivity growth. The economic stimulus bill the Congress enacted earlier this year provided for accelerated depreciation for all investments in plant and equipment -- which was useful but insufficient. First, it wasn't focused on the short-term -- companies have three years to make their investments. And second, it was a deduction, not a credit. The investment tax credit I propose -- 20 percent, for one year, focused on IT -- would fix all these flaws, and give us a quick, much-needed boost.'

additional tax rebates:

'Now, we should do what we failed to do before: give a new rebate to the 34 million taxpayers who didn't get one in 2001. These are primarily low-income workers who don't pay taxes -- precisely the people who are most likely to spend their checks immediately, and help lift up sagging spending.'

reforms to the 401(k) savings scheme:

'We need to enact broad 401(k) reforms that will liberate employees to sell their company stock as freely as the big executives, safeguard them from the riskiest investments, and ensure that those at the very top of the executive ladder are treated by the same rules as every other employee-investor.'

and a jobs subsidy:

'I want to propose a New Jobs Tax Credit that would give companies who hire new employees during the next year a cut in their payroll taxes. By lowering the marginal cost to companies of hiring new employees over the short term, this would encourage new job creation across the economy and get Americans working again.'

Republicans welcomed Joe Lieberman to the debate on the economy: 'The president and Republicans have been acting on getting the economy moving for months,' said Kevin Sheridan, a spokesman for the Republican National Committee. 'Senator Lieberman should start by explaining why the Senate has not passed a budget or terrorism insurance or a number of other positive proposals that would get this economy moving.'

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