| The White House President George W. Bush |
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For Immediate Release
Office of the Press Secretary
May 17, 2006
Fact Sheet: Extending the President's Tax Relief: A Victory for American Taxpayers
President Bush Signs Tax Relief Extension Reconciliation Act of 2005
In Focus: Jobs & Economy
Today's Presidential Action
Today, President Bush Signed The Tax Increase Prevention And Reconciliation Act Of 2005, Extending His 2003 Tax Cuts On Dividends And Capital Gains. This legislation also contains an Alternative Minimum Tax (AMT) patch enabling millions of middle income families to avoid paying higher taxes in 2006.
In The Past Five Years, The President's Tax Relief Has Helped Spur Growth By Keeping $880 Billion In The Pockets Of American Taxpayers. We reduced taxes for every American who pays income taxes, doubled the child tax credit, reduced the marriage penalty, created new incentives for small businesses to invest, and put the death tax on the road to extinction. The American people have used the tax relief to provide for their families, create jobs, and help make America's economy the envy of the industrialized world. The President's tax relief helped our economy grow at a strong 4.8 percent annual rate in the first quarter and helped our economy create more than 5.2 million jobs since August 2003.
The President's Tax Relief Is Letting Americans Keep More Of Their Own Money
The President's Tax Cuts On Dividends And Capital Gains Have Succeeded In Lowering The Cost Of Capital And Encouraging Businesses To Expand And Hire New Workers. Lower tax rates on dividends and capital gains reduced the effective tax rate on business investment by more than 15 percent. When these cuts were passed in 2003, business investment had been dropping for several years. Since then, business investment has been growing at more than 9 percent per year. Spending on equipment and software has hit record levels, and businesses have hired millions of new workers to fill the jobs this investment creates.
The President's Tax Cuts On Dividends And Capital Gains Are Reaching Families And Businesses Alike. About half the households in America - 57 million in all - have some investment in the stock market. By cutting the taxes on dividends and capital gains, we helped add about $4 trillion in new wealth to the stock market and benefited Americans who own mutual funds, IRAs, and 401(k) plans.
Dividend Tax Relief Benefits The More Than 28 Million Americans Who Rely On Dividend Income. In 2003, 7 million seniors received income from dividends.
In 2004, The Number Of Companies Paying Dividends Increased By 7.2 Percent Over 2003 - The Highest Since 1998.
The Temporary Alternative Minimum Tax (AMT) Patch Contained In The Tax Relief Package Enables About 18.2 Million Taxpayers To Avoid Facing Higher Taxes. In 2005, about 4 million taxpayers were affected by the AMT. Without this temporary patch, the number would have risen to 22.2 million taxpayers in 2006.
Because Of The President's 2001, 2003, And 2004 Tax Cuts, The Treasury Department Estimates That In 2006:
111 Million American Taxpayers Will Save An Average Of $1,877.
A Family Of Four Making $40,000 Will Save $2,010.
More Than 5 Million Individuals And Families Will Have Their Income Tax Liabilities Totally Eliminated.
44 Million Families With Children Will Save An Average Of $2,493.
14 Million Elderly Individuals Will Save An Average Of $2,043.
25 Million Small Business Owners Will Save An Average Of $3,641.
Strong Economic Growth And Disciplined Spending Is The Right Way To Reduce The Federal Deficit
In FY05, Tax Revenues Grew By $274 Billion - An Increase Of Nearly 15 Percent Over The Previous Year. So far this year, tax revenues are 11 percent higher than at the same point last year, which is better than projected. More than a quarter of these new tax revenues come from corporations, who pay more taxes as they prosper in our growing economy. By growing the economy, we are staying on track to meet our goal of cutting the deficit in half by 2009.
The President's Tax Relief Has Helped America's Economy Hit Full Stride
GDP Grew At A Strong 4.8 Percent Annual Rate In The First Quarter. This follows our economic growth of 3.5 percent in 2005 - the fastest rate of any major industrialized nation last year.
More Than 5.2 Million Jobs Have Been Created Since August 2003, And 138,000 Jobs Were Created In April. The unemployment rate is 4.7 percent, lower than the average of the 1960s, 1970s, 1980s, and 1990s.
Productivity Increased At A Strong Annual Rate Of 3.2 Percent In The First Quarter.
Hourly Compensation Rose At A 5.7 Percent Annual Rate In The First Quarter. Average hourly earnings have risen 3.8 percent over the past 12 months, their largest increase in nearly five years.
Real After-Tax Income Has Risen By 13.8 Percent Since January 2001. Real after-tax income has risen by $2,398 (8.2 percent) per person since January 2001.
The Conference Board Index Of Consumer Confidence Increased In April To Its Highest Level In Almost Four Years.
Most Congressional Democrats Opposed The President's Tax Relief That Helped Spark These Economic Gains
Last Week, Almost All Congressional Democrats Voted Against Extending The President's Tax Relief. Most Congressional Democrats voted against the President's 2001 and 2003 tax relief as well.
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