President Bush is wasting no time in promoting his plan for a comprehensive tax cut that would benefit all Americans, slashing the lowest tax rate to 10% and the highest rate to 33%. Recalling the early days of the Reagan era, Bush claims a massive tax cut at this time will stimulate the economy. "I strongly believe that a tax relief plan is an important part of helping our country's economic recovery," Bush proclaimed to members of Congress.
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The estate tax would be repealed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.