Tax Cuts Extended

The tax cut legislation also includes a provision that would allow U.S. financial services companies to better compete for global business, as well as a provision that allows individuals, regardless of their income, to convert their traditional IRA to a Roth IRA come 2010.

Democrats have criticized the legislation as favoring the rich, but Mark Lackritz, president of the Securities Industry Association (SIA) hails the legislation as good news for economic growth, the economy, investors, and the securities industry. When the tax rates on capital gains and dividends were first cut in 2003, Lackritz told reporters on a recent conference call, the economy was stagnant, and growth was a little over 1% per year. Following passage of the tax cuts in 2003, economic growth picked up in the first quarter of 2003 to 8.4%, and since then it's averaged around 4%, he said. Since 2003, the country has added 5.4 million new jobs, and the unemployment rate has fallen to 4.7%, he said.