Bush Plan Calls for Retroactive Tax Cut
The Bush plan, which the President would like to make retroactive to January 1, 2001, includes the following features:
- The current maximum individual income tax rates of 39.6% and 36% would be cut to 33%. The 28% rate would be cut to 25%, the 15% rate would remain intact, taxpayers whose taxable income is lower than $6,000 would pay tax at a new, low 10% rate.
- The child tax credit would be doubled from $500 to $1,000
- The disparity in the tax rates that negatively affects married couples where both spouses work (otherwise known as the marriage penalty) would be reduced
- The estate tax would be repealed
The Bush tax plan calls for these provisions to be phased in over a period of five years.
In his presentation to Congress Monday, President Bush waved a giant check made out to "U.S. Taxpayer" for $1,600 - the amount he claims the average individual taxpayer will save each year once his plan is fully implemented.