US Will See Benefit Of Tax Cuts By Year's End Says Snow

by Leroy Baker, Tax-News.com, New York

11 June 2003

In an interview with Fox News last Saturday, Treasury Secretary John Snow said he anticipated the recently enacted tax cuts would translate into higher rates of economic growth in the fourth quarter of 2003.

"We are going to see the jobless (rate) improve. We're going to see people going back to work. We're going to see higher growth rates. We're going to see a more vibrant economy. And we're going to see it by the fourth quarter of this year," claimed Snow, a staunch supporter of President Bush's economic stimlus plan.

In particular, Snow said the reduced tax on dividends and capital gains will result in a more robust stock market performance in the coming months. "Lowering the tax on investments is going to increase the returns in the stock market and is going to help boost the stock market, In fact, I think we're already seeing some effects of that," he observed.

Snow said that whilst the economy was recovering without the tax cuts, growth rates have been painfully slow, and the tax cuts will result in GDP growing at twice the present rate in the coming months. "I think we'll get back to growth rates that are in the high 3s, maybe over 4, and when you do that you put a lot of people back to work," he predicted.

The Treasury Secretary rejected the suggestion of a runaway budget deficit, saying that increased economic activity would result in higher revenues for the government, though he cautioned that spending must be kept under control if the deficit was to remain manageable.

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