14 Jan 2003 Talking Points on Taxes: Bush’s New Plan for Tax Relief & Economic Growth
In January 2003, President Bush unveiled an ambitious tax relief, economic growth and job creation plan. Its reduces the marriage penalty, increases the child tax credit to $1000, moves lower income workers who pay income taxes by immediately moving them into lowest tax bracket of 10%; eliminates the double taxation on dividends (almost half of this savings those over 64); cuts taxes for small business investment and helps the unemployed through new personal re-employment accounts of up to $3,000 to help them find a job. 1
* President Bush’s new tax cut plan would give 92 million taxpayers an average tax cut of $1,083 in 2003. 46 million married couples would receive an average cut of $1,716; 34 million families with children would receive an average cut of $1,473; 13 million seniors would receive an average cut of $1,384; 23 million small businesses would receive cuts averaging $2,042 and 6 million single parents would receive an average $541 cut. 2
* The Council of Economic Advisors believes the President’s tax cut proposal would help the economy create 2.1 million new jobs over three years. 3
* Americans favor the President’s tax plan. According to a January 3-5, 2003 Gallup/USA Today/CNN poll, 86 percent favor expanding tax credits for families with children, 80 percent favor reducing the marriage penalty, 65 percent favor accelerating next year’s planned tax cut, 65 percent favor cutting taxes for businesses investing in facilities and equipment and 58 percent favor reducing taxes on dividends. Majorities of 50-70 percent say each of these tax cuts will help the economy. 4
* Under the President’s plan, upper income taxpayers receive a smaller percentage tax reduction than lower and middle-income taxpayers. An example: A couple with two children earning $250,000 a year would receive an 8 percent cut; a family with a $100,000 income would see a 21 percent cut; a $60,000 a year family would receive a 27 percent cut; a $40,000 a year family would receive a 96 percent cut. Few families of four making less than $40,000 pay federal income taxes. 5 A second example: Families making more than $200,000, who pay 45% of the income tax, will get 40% of the tax cut while families making less than $100,000, who pay 28% of the income tax, will get 34% of the tax cut. 6
1 E-mail “E-Champions” publication of the Republican National Committee, January 7, 2003 and “Tax Foundation Fiscal Facts,” Tax Foundation, January 2003.
2 “Taking Action to Strengthen America’s Economy,” publication of the White House, January 2003.
3 “Taking Action to Strengthen America’s Economy,” publication of the White House, January 2003.
4 January 3-5, 2003 Gallup/USA Today/CNN poll, as cited by the White House Office of Strategic Initiatives.
5 “Different Benefits to Different Families,” National Center for Policy Analysis Daily Digest of 1/1/10/03, summarizing a Deloitte & Touche study and the New York Times article “Plan Gives Most Benefits to Wealthy and Families” by Edmund L. Andrews, January 8, 2003. The NCPA document was available online at http://www.ncpa.org/iss/tax/2003/pd011003e.html as of January 14, 2003.
6 “Short-and Long-Term Benefits of Bush Tax Plan,” National Center for Policy Analysis Daily Digest of 1/10/03, summarizing a New York Times article by Lawrence B. Lindsey, “The Right Tax Plan for Today and Tomorrow,” January 10, 2003. The NCPA document was available online at http://www.ncpa.org/iss/tax/2003/pd011003e.html as of January 14, 2003.