President George W. Bush is expected to propose the elimination of taxes on dividends paid to shareholders, industry sources said last night.
Republicans predicted the move would boost the stock market after three years of losses.
But Democrats called Mr Bush's economic package, expected to cost as much as $600 billion over 10 years, a sop to the rich.
Moderate Republicans may also oppose the new tax cuts and spending measures, which Mr Bush is expected to unveil tomorrow.
Economists were also divided on the plan. Some said it would have little stimulative effect while worsening bigger-than-expected budget deficits.
Mr Allen Sinai of Decision Economics said it was worthwhile given the anemic state of the economy - possibly adding one-half to three-quarters of a percentage point to growth - but would not be a cure-all.
Republican sources said the White House sounded out conservatives over the weekend about completely eliminating the tax paid by shareholders on corporate dividends. The change would cost as much as $300 billion and would be the centerpiece of the Mr Bush's economic package.