For Immediate Release
Office of the Press Secretary
April 15, 2002
Fact Sheet: President Bush Calls on Congress to Make Tax Relief Permanent
Today's Presidential Action
President Bush traveled to Cedar Rapids, Iowa, to visit with
workers who are benefiting from the tax relief plan proposed by the
President and passed by the Congress. The Economic Growth and Tax
Relief Reconciliation Act of 2001 that President Bush signed into law
provides a tax cut for all families who pay Federal income taxes ?
helping to strengthen our economy by giving Americans more money to
spend.
President Bush also called on Congress to make his tax relief
plan permanent ? to ensure that Americans can make long-term plans when
saving for their children's education, when planning for retirement and
when planning to pass their assets on to their children.
Background on Tax Relief
When President Bush's tax relief plan is fully phased-in:
Over 100 million individuals and families will pay lower taxes;
43 million married couples will see their taxes reduced on
average by more than $1,700 a year;
38 million families with children will receive an average tax cut
of almost $1,500;
11 million single mothers with children will be able to keep, on
average, $770 more of their income to care for their children;
13 million seniors will see their taxes reduced, on average, by
$920;
3.9 million taxpayers, including 3 million taxpayers with
children, will have their income tax liability completed eliminated by
the President's tax cut; and
Small business owners and entrepreneurs will receive 79% of the
tax relief associated with reducing the top income tax rates to 33% and
35%. And, nearly 75% (22.6 million) of the 30.5 million taxpayers with
income from flow-through entities (e.g., owners of sole
proprietorships, farm proprietorships, partnerships, S corporations and
taxpayers with rental income) will receive a tax reduction.
Tax Relief Should be Made Permanent
Unfortunately, the tax relief legislation as passed by Congress
contains a provision that causes it to sunset at the end of 2010. If
the sunset provision is not repealed:
Taxes would rise by an average of $1,040 for 104 million
taxpayers, including workers, married couples and families with
children; and
Taxes would increase by over $200 billion in 2011.
For example:
Eliminating the 10% rate bracket would cause taxes to increase by
$45 billion; ? Married couples would pay an additional $10 billion
because marriage penalty relief provisions would not be extended; and ?
Restoration of the death tax and related provisions would increase
taxes by $69 billion.
Failing to make the President's tax cut permanent could have
other adverse effects. For example:
IRA funding limits would shrink by more than 60%; and ? Other
changes would make it costlier for prospective parents to adopt a
special needs child or for working parents to pay for child care.
In 2011, a median-income family of 4 would see their taxes
increase by $1,866 relative to an extension of the President's tax
cut.
Taxes would increase by $963 (relative to extending the
President's tax cut) for a single mother with one child who earns
$25,000.
| Tax Hike in 2011
for 4-person families
|
| A family of four with an income equivalent to $36,268 in 2002 will face a tax hike of $2,035 in 2011. |
| A family of four with an income equivalent to $46,756 in 2002 will face a tax hike of $1,928 in 2011 - a 100% tax increase.
|
| A family of four with an income equivalent to $69,328 in 2002 will face a tax hike of $2,000 in 2011 - a 33% tax increase.
|
The time to fix this problem is now, so families can make their
plans for the future today, without needlessly worrying how these plans
could be jeopardized by stubborn inaction in the future. Congress
should act to make the President's tax relief plan permanent.
For more information on the President's initiatives, please
visit www.whitehouse.gov
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