House Passes President's Tax Cut | AccountingWEB

House Passes President's Tax Cut

One down one to go - the House votes "Yea," and the tax bill is on to its appointed rounds in the Senate, where legislators promise it won't have quite such an easy ride.

The House voted 230-198 on Thursday and passed a $958 billion tax cut which will lower tax rates for nearly all Americans retroactive to January 1, 2001. Ten Democrats and one Independent joined 219 Republicans to pass the bill by its narrow margin.

If the bill passes in the Senate, the tax rate reduction will be completely phased in by 2006. The current tax rates of 15%, 28%, 31%, 36%, and 39.6% will be reorganized into four tax rates of 10%, 15%, 25%, and 33%.

The immediate effect of the tax cut, which would be effective in 2001, would reduce the rate from 15% to 12% on the first $6,000 of income for all single taxpayers and the first $12,000 for all married taxpayers filing jointly, thus producing a $180 tax benefit for single taxpayers and a $360 tax benefit for married couples.

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