Here's how the president's economic stimulus package may affect you.January 8, 2003: 1:12 PM EST

NEW YORK (CNN/Money) - As expected, President Bush on Tuesday proposed an accelerated reduction of income tax rates and the elimination of taxes on dividends for individual investors. His proposals were the centerpiece of an economic stimulus plan that the White House estimates will cost $674 billion over 10 years. According to estimates by the Tax Foundation, the average U.S. family of four making $66,619 might save $1,133 if four of Bush's proposals are implemented, not including the elimination of dividend taxes. (To see how much you might save depending on where you live, click here.) The White House, meanwhile, estimates that the president's proposals will save taxpayers an average of $1,083 on their 2003 taxes, while a family of four with two wage earners making $39,000 would save $1,100. How much of those savings taxpayers would keep, however, is another question. Many states have been facing fiscal problems and are planning spending cuts and tax increases. "There's no question that a significant fraction of savings...are going to be gobbled up by hungry state and local governments," said

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To calculate the amount of dividends that can be distributed tax-free to shareholders, a corporation will need to annually compute the amount – the Excludable Dividend Amount (EDA) – that reflects income that has already been taxed.

I flew in today with the Senator from Illinois, Peter Fitzgerald. I appreciate his leadership; I appreciate his friendship. And as we speak, the Senate is debating the Fitzgerald bill which will extend unemployment benefits to those who are looking for work in America. And, Peter, I want to thank you for your leadership on this important issue. (Applause.)

· The only difference is shareholders should see a substantial decline in their taxable dividends and an increase in their return on investment.

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