The president’s stimulus package adds up to some $407 million to stimulate the Maine economy – this year.

Now that the economic uncertainty of the Iraq conflict is behind us, President Bush has appropriately refocused his attention on stimulating the economy to create jobs, boost small business expansion and provide tax relief for millions of hard-working Americans.

Maine taxpayers and Maine businesses have been stretched to the breaking point by Maine’s highest-in-the-nation tax burden. Gov. Baldacci rightly has focused on reducing the growth in state spending as a crucial first step in reducing our tax burden. Moreover, the governor recognizes Maine needs more taxpayers, not more taxes.

But we all know our state economy relies on a strong national economy to prosper. That’s why our support for the president’s jobs and growth plan is so important.

For all Americans, the president’s plan would: raise the child tax credit from $600 to $1,000 this year instead of in 2010; reduce the marriage penalty this year instead of waiting until 2009; and provide an average tax cut of $1,083 in 2003 for 92 million working Americans.

For Maine’s small businesses and the self-employed, the president’s plan provides growth incentives through an increase in expensing limits from $25,000 to $75,000. And Maine’s small businesses also would receive an average tax cut of $2,042 that can be used to hire additional workers, increase pay, or pay for health insurance costs.

A cornerstone of the president’s growth plan is to eliminate the double taxation of stock dividend income. It is taxed at the corporate level as profit, and again as personal income when it is distributed to shareholders as dividends, resulting tax rates approaching 70 percent. These punitive tax rates reduce stock values, capital investment and savings. Many economists believe that by eliminating the double taxation of dividends, stock values will rise by as much as 10 percent immediately.

Today, more than 85 million Americans own stocks in various corporations and an estimated 35 million Americans receive dividends on these investments. More than half of these folks are senior citizens who, in many cases, rely on divided income to supplement Social Security or other retirement benefits.

A recent PriceWaterhouseCoopers study commissioned by The Business Roundtable reports the president’s stimulus plan will increase job growth forecasts nationally by 1.8 million more jobs each of the next two years, and by an average of 1.2 million new jobs for each of the next five years.

Maine lost 2,000 jobs last year; we need this stimulus to get those jobs back and to create new jobs.

Economists estimate the president’s growth plan would result in a total federal tax savings of $368 million for Maine citizens this year alone. Assuming Maine conforms to federal tax changes, eliminating the tax on dividends would save Mainers $22 million; reducing the marriage penalty, $15 million; and the business deduction changes would give Maine’s small businesses $2 million to add new jobs. That adds up to some $407 million to stimulate the Maine economy – this year.

We need swift approval of the president’s stimulus plan to help get Maine’s economy moving again.

Sen. Kenneth D. Blais of Litchfield represents District 20 and serves on the labor committee and joint select committee on joint rules.