Not wasting any time, the House Ways and Means Committee, Thursday, approved a version of President Bush's tax cut plan, and the House will be able to vote on the bill next week. The Economic Growth and Tax Relief Act of 2001, if made into law, will include tax reductions retroactive to January 1, 2001.
The bill calls for a reduction of the current 15% tax rate to 12%, and this rate would apply to the first $12,000 earned by married couples and the first $6,000 earned by singles. The 15% rate will apply to income over this level, up to the next tax bracket of 28%.
This initial tax change will produce an immediate savings of $360 for married couples in 2001, $180 for single taxpayers. The bill includes a phase-in period whereby all of the lowered tax rates discussed in the President's address to Congress earlier this week would be put in to place by 2006.
No other aspects of the President's tax overhaul are included in this bill. It is expected that Congress will address other tax-saving provisions at a more leisurely pace.
You will need the Adobe Acrobat Reader to read the full text of this tax bill.