A stimulating approach

The Bush administration is keen to push through a tax reform package designed to kick-start the US economy by restoring investor confidence in the equity markets. But as Louise Purtle of credit research provider CreditSights asks, can the plan succeed or is it merely pie in the sky?

Since President George Bush unveiled his fiscal stimulus package on January 7, the cornerstone of that plan has generated widely differing reactions. The controversy centres on the proposal to exempt dividends from personal income taxes (removing so-called double taxation). The only point of consensus on the subject appears to be that few expect the legislation to pass in its current form. This is one key reason – along with myriad other distractions – why the equity market’s enthusiasm has so