ALEXANDRIA, Va., Jan. 15 /PRNewswire-USNewswire/ -- As Congress and the White House seem to be readying proposals this week to address softening economic indicators, the 362,000-member National Taxpayers Union (NTU) today provided some advice and evidence on what should go into a good stimulus package.

To view the Multimedia News Release, go to: http://www.prnewswire.com/mnr/ntu/31416/

"Elected officials who think they can tinker with our complex economic machinery and make it run better should step back and put down their wrenches," NTU Director of Government Affairs Kristina Rasmussen said.

Since its founding in 1969, NTU has warned against the dangers of government "pump-priming" schemes that attempt to manipulate the economy. Instead, NTU has argued, lower taxes and less meddling in markets are likelier to achieve robust income and employment growth. Based on these experiences, Rasmussen offered several "Dos and Don'ts" for economic stimulus policies:

-- DO ensure that tax relief is aimed at people and institutions who

actually have a tax burden; more "refundable" credits or reductions

won't reward or encourage the workers and small businesses who will

keep the economy growing.

-- DO improve our global competitiveness by lowering the corporate income

tax burden. In uncertain times, a permanent reduction in some of the

highest business tax rates in the world would give firms the

confidence to plan for future expansion.

-- DO stimulate lasting growth by extending the lower tax rates for

capital gains and dividends. This year's 0 percent rate for some

Americans will expire in 2009. Tens of millions of small investors

would benefit from making the low rate permanent now.

-- DON'T try to spend our way into prosperity through more government

spending programs (which in turn require higher tax collections to

balance the budget). According to the Joint Economic Committee of

Congress, the cost to the economy of raising $1 in additional taxes

for new federal programs is $1.40 -- a losing formula for recovery.

-- DON'T dole out tax "rebate" checks that are short on relief and long

on rhetoric. Rebates didn't cure stagflation woes in the 1970s, and

partially succeeded in 2001 only because they were tied directly to

actual rate reductions.

-- DON'T respond to rising home foreclosures and energy costs with

bailouts or price controls. More government backing for bad mortgage

debt will only increase risky lending, while price controls -- such as

those enacted under Nixon -- will lead to lines at the pump.

"Less, not more, government intervention will keep America's private sector humming along, and with it the well-being of our citizens," Rasmussen concluded. "Making the 2001 and 2003 tax cuts permanent, reining in excessive spending, and clearing away needless regulations will send the right signals to our economy at just the right time."

NTU is a non-partisan citizen group working for lower taxes and smaller government at all levels. Note: For further information on proper stimulus policies, visit www.ntu.org. SOURCE National Taxpayers Union

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