President Bush signed his tax cut bill into law on May 28th, just hours after Congress passed the bill to reduce taxes by more than $350 billion dollars. The House of Representatives passed the legislation by a 231-200 vote, followed by a razor-thin 51-50 Senate margin. It even became necessary to bring Vice President Dick Cheney out of seclusion to provide the tie-breaking vote in the U.S. Senate. Despite record-breaking federal and state budget deficits the tax cut bill was passed on a party-line vote with only 9 Democrats supporting it and 4 Republicans opposing it.
Even the business-friendly New York Times was appalled by the details of the final bill, describing it on their editorial page as “unfair, dishonest, and economically unsound.” The final bill excluded any additional child tax credits for tens of millions of families with children earning between $10,500 and $26,635 annually. Most other families with children will receive a $400 tax rebate - per child - from the federal government later this year, but the vast bulk of the tax cut bill is directed at business and the wealthy.
Here’s a summary of who will get what under the new law:
Income: Average 2003 tax savings
less than $10,000: $1
$10,000 to $20,000: $53
$20,000 to $30,000: $189
$30,000 to $40,000: $323
$40,000 to $50,000: $451
$50,000 to $75,000: $703
$75,000 to $100,000: $1,611
$100,000 to $200,000: $2,506
$200,000 to $500,000: $5,015
$500,000 to $1 million: $17,307
more than $1 million: $93,530
In short, a worker earning $45,000 dollars will receive enough tax cut to buy a set of new tires. A millionaire, however, will receive enough to purchase 3 new mid-sized automobiles. Or two SUV’s. Or a small condo at the beach. You get the picture...
For a detailed analysis of the legislation, visit the web page of the Center on Budget and Policy Priorities at: www.cbpp.org Look for the story dated June 1st entitled, “Tax Cut Law Leaves Out 8 Million Filers Who Pay Income Taxes.”