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 Thursday, 2 January, 2003, 18:08 GMT
'No class war' in US stimulus package
US President George W Bush at his ranch in Texas
How big will the tax cuts be?
US President George W Bush has denied accusations that his new economic stimulus package, to be unveiled next week, will indulge in reverse "class war" by favouring the rich at the expense of the poor and middle classes.

Speaking to reporters at his ranch in Texas, where he is spending the holiday season with his family, Mr Bush said his plan would benefit all Americans.

"I'm concerned about all people," he said.

"I understand the politics of economic stimulus - some people want to turn it into class warfare."

During weeks of behind-the-scenes talks, senior Republicans have been pushing for an acceleration of the 10-year tax cut programme passed by Congress last year.

But others are advising against, since many of the back-loaded cuts favour the most wealthy, and do little for mainstream Americans.

Instead, advisers said, the elements of most benefit to middle- and upper-income families - those with incomes below about $300,000 - will be prioritised

Unemployment

The stimulus package, Mr Bush said, is to concentrate on job creation - a key worry for Americans, recent polls have suggested.

The past year has seen mass layoffs as companies adjust to the end of the boom years of the 1990s, with the roster of benefit claimants rising 13,000 in the past week alone.

Many of those now out of work have just lost their unemployment insurance, a fact which may also guide the package's contents.

"Next week when I talk about an economic stimulus package, I will talk about how best to create jobs as well as how to take care of those who don't have a job," Mr Bush said, declining to give any further details.

The administration is well aware that after a year of concentration on terrorism and foreign affairs, the 2004 Presidential election could well hinge on the state of the battered economy.

Mr Bush has no wish to repeat his father's one-term presidency, the curtailing of which is usually blamed on an insufficient focus on the nation's finances.

Business breaks

But even if the full tax cut agenda does not make it into the package - and aides said that Mr Bush still has to sign off on the programme - some items high on the Republicans' agenda are certain to make it through.

Among them are thought to be cuts to taxes paid on dividends, supposedly to encourage investment in the stock market again.

Opponents say this will disproportionately reward the rich, with little direct effect on the economy at large.

Other business tax changes, including breaks on depreciation costs, are likely.

More radical ideas - such as a three-year moratorium on capital gains tax, much favoured by the powerful US right-wing think tanks - are thought unlikely to make it into the final draft.

See also:

02 Jan 03 | Business
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06 Nov 02 | Business
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