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Bush has pushed hard for dividend tax relief. Eliminating the double taxation of dividends is a longtime dream of corporate America. In the wake of President George Bush’s decision to make the proposal the heart of his $674 billion, ten-year tax cut, trade groups and companies are ramping up to promote the policy’s potentially salutary effects on stock prices and the economy. So far, the organizations are massing under one enormous umbrella group, a White House — supported body called the Tax Relief Coalition. The coalition has operated out of the offices of the National Association of Wholesaler-Distributors since it was founded in 2001 to promote the president’s first tax package. The coalition’s 70 or so steering committee members had chipped in about $400,000 as of mid-February to persuade wary lawmakers to back the dividend plan. Jade West, the longtime Senate GOP staffer who is now the association’s senior vice president, says that the Business Roundtable, a group of CEOs, is enthusiastic in its support. The utility and high-tech companies are coming on board, as are the communications firms. But, like all broad coalitions, the Tax Relief group, which has been briefed by Bush adviser Karl Rove and White House chief economic adviser, Stephen Friedman, is so large that its members inevitably support competing tax proposals as well. A lot of companies would just as soon see a tax rate reduction or stepped-up depreciation, says one lobbyist. To that end, a separate coalition led by Verizon Communications Inc. and Citigroup Inc. held its first meeting at Verizon’s D.C. office on February 12. The group’s primary target is the elimination of the dividend tax. The Verizon-Citigroup’s principal outside lobbyist is expected to be Edward Gillespie of Quinn Gillespie & Associates. The dividend tax cut is the centerpiece of the president’s whole economic package, says Gillespie. Yet it’s been subject to the most disinformation and the least advocacy outside of the White House. No matter how potent the lobbying power, the key to the proposal’s success lies with President Bush, says the Clarke/Bardes Consulting Federal Policy Group’s Kenneth Kies. He represents several clients seeking to eliminate the tax. Bush is the main event, he says, in whether this gets passed. — T.R. Goldman

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