Bush Tax Cuts: It's Your Money | |
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Given friendly treatment in Congress, the income tax cutting plan of President-Elect Bush may start to take effect by 2002. When it does, if it does, almost all taxpayers will feel its effect. How good will it feel?
Bush is no novice tax cutter. As governor of Texas, he pushed through a $3 billion reduction in local property taxes, a $300 million cut in sales taxes, and still had enough state budget surplus left to give Texas teachers a $1 billion raise and spend $600 million on new schools. Today, Texans still pay no state income tax and enjoy the third-lowest combined tax burden in the country.
On
Feb. 6, 2000, while campaigning in Durham, New Hampshire, candidate Bush
explained his philosophy on taxation just about as plainly as a politician can.
"If
there's a recession it's important to cut taxes to make sure the economy grows.
. . . It's also important to cut the taxes where there's times of plenty. . . .
It's important to cut the taxes to make sure Washington, D.C., does not spend
the surplus. . . . This is not only no new taxes. This is tax cuts so help me
God." -- George W. Bush, Feb. 6, 2000
On Dec. 16, 2000, while announcing some new White House staff members,
President-Elect Bush
again vowed to stick by his campaign pledge to cut over $1.6 trillion in taxes
over the next ten years. How the Bush Tax Plan Would Work To give people their "money
back," Bush plans to do his cutting at the core of the tax code -- the tax brackets.
Those fearsomely fuzzy mathematical calculations that determine how much we pay,
based on how much
much we make. The Bush Tax Brackets In addition, the Bush plan would allow all taxpayers to deduct charitable
contributions without itemizing other deductions, and increase the annual contribution limit on Education Savings Accounts from
$500 to $5,000 per child. Under this plan, say Bush's financial planners, some six million low and
middle-income families will pay no taxes at all. To compensate the government for revenue lost to tax cuts, Bush's plan would
draw from the budget surplus estimated to reach $4.56 trillion
by 2010. Enough fuzzy math! What would the Bush tax cut plan mean to you -- in money? Next page > Examples of the Bush Tax Plan
Savings > Page 1, 2
While he strongly supports laws repealing or reducing the
estate tax and marriage penalty, Bush's tax cut plan does not stress targeted tax reduction legislation like education tax credits, or business
tax breaks. Bush says he considers them to be a "way of
governing" through tax reduction, rather that a way of giving "the
people their money back."
Under the Bush plan, the tax brackets would be reorganized to the taxpayer's
advantage as follows:
