The Bush stimulus plan is just like the last one only more so – permanent tax cuts for the rich instead of temporary assistance for those in the bottom half of the income distribution and temporary increases in public expenditure. Nathan Newman has a more specific critique of the centrepiece, elimination of taxes on dividends, as does Paul Krugman.

There’s a plausible microeconomic case for not taxing dividends, or for imputation on the Australian model, based on a simple model of how companies work, but when you look at all the tax advantages associated with company structures, the case looks a great deal weaker.

Update Brad DeLong has much more on this, with detailed analysis of the distributional impact, a ‘more in sorrow than anger’ piece on the declining credibility of CEA Chair Glenn Hubbard and lots of links. While you’re there, check out his “overheard at the AEA meetings” post, for a view of how (academic) economists talk among themselves.