As members of Congress prepare to begin the conference committee on the tax reconciliation bill, the discussion of dividends and capital gains tax relief is again taking center stage.

Conferees will have an important decision to make. The decision on whether to allow taxes to increase on dividends and capital gains is really a choice about whether and how much we want the economy to grow and how many jobs we want to create.

The crux of this issue is not hard to understand. The formula is simple — lower rates on dividends and capital gains make investment more attractive. The capital provided by investment is the fuel that firms use to grow and to hire workers. The lower the tax rates on dividends and capital gains, the more the economy grows and the more jobs are created.

The engine of a free-market economy is not the government but entrepreneurs and risk-takers who need investment capital in order to grow. That’s why this issue is so important. As Nobel Prize-winning economist Edward C. Prescott put it in a recent Wall Street Journal op-ed, higher taxes on capital gains and dividends “are particularly cumbersome because they hit a market economy right in its collective heart.”

The higher the tax rates on capital gains and dividends, the less fuel available for the investment and innovation that propels economic growth and job creation. Not to extend tax relief on capital gains and dividends would be to starve the American economy of the fuel it needs to grow.

When President Bush proposed these reforms a few years ago, there was a problem to be fixed that was holding our economy back. The American economy had begun to recover from the recession, but business investment, the lifeblood of economic growth, was frustratingly stagnant.

By May 2003, when the Jobs and Growth bill became law, new orders of non-defense capital goods (excluding aircraft) — a key measure of business investment — had fallen by 20 percent since January 2001. To put the economy on track and to get job creation going, something had to be done to address lagging business investment.

The Jobs and Growth bill increased incentives for business investment by, among other things, lowering rates on capital gains and dividends to 15 percent. The results are unmistakable. In the years since Jobs and Growth was signed into law, new orders of non-defense capital goods (excluding aircraft) have risen 34 percent.

As expected, when investment rose, businesses began to expand and accelerated the hiring of new workers. Within two months of Jobs and Growth becoming law in May 2003, the unemployment rate began to decline steadily from 6.1 percent to the current level of 4.7 percent — well below the modern historical average of 5.9 percent.

Job growth soon began to rebound as well, with 4.7 million new jobs created to date. Growth in the gross domestic product has also accelerated, maintaining an average rate of nearly 4 percent since May 2003. Economic growth has also swelled tax revenues. In fiscal year 2005, federal revenues rose 14.6 percent over fiscal year 2004, the largest year-over-year increase in more than 20 years.

To plan for the future, businesses need certainty — they can’t plan if they are unsure whether this tax relief will be available down the road. When companies decide to invest for the future — to expand a plant or buy equipment or hire workers — they often do so with an eye toward a return five, 10 or 20 years later.

The benefit of making tax relief for capital gains and dividends permanent is reaped not only in additional investment in the short term but in long-term investments that firms will make if they are comfortable that that taxes on capital gains and dividends are not going to rise suddenly.

As Congress considers this important issue, we must not lose sight of what is at stake for America’s families. The investor class in America is the middle class. Half of all households in the United States have investments in equities, and the median equities investor has an income of $65,000.

Let’s be clear about what this debate is about. This is not a tax cut for the wealthy. This is tax relief for the middle class that is vital for continued economic growth and job creation for all Americans.

Raising tax rates on capital gains and dividends is exactly the wrong choice for middle-class families and the wrong path for a growing economy. I urge Congress to make a choice in favor of continued economic expansion and job creation. Extend the 15 percent rate on capital gains and dividends and make a choice for growth.

Evans is the chief executive officer of the Financial Services Forum, which advocates for the interests of major American financial institutions. He was previously President Bush’s secretary of commerce.