Who Gets What From Bush Tax Cut

The facts are unlikely to have any impact on Democratic demagogues intent on waging class war, but, according to an analysis done by the nonpartisan Tax Foundation, the new Bush tax-cut plan promises to be a windfall for the middle class.

The first Bush tax cut law in 2001, says the Tax Foundation, "effectively eliminated" the income tax for families of four earning less than $35,000. If enacted, the new Bush tax proposal would eliminate 96% of the current income tax bill for families of four earning $40,000.

Under Bush’s plan, they would pay a total of $45 in federal income tax.

In addition to the elimination of the tax on dividends that is getting most of the media attention, Bush’s plan would accelerate each of the phased-in tax cuts enacted in his 2001 proposal. If approved by Congress, the cuts will be retroactive to January 1, meaning they will translate into significant immediate reductions in the taxes withheld from workers paychecks-that is, if they didn’t drop off the tax rolls after the first Bush tax cut.

The Bush plan, the Tax Foundation says, includes:

- "Raising the child tax credit from $600 to $1,000. For a family with two children (earning less than $100,000 per year), this provision alone will mean a tax cut of $800."

- "Reducing the marriage penalty by (1) setting the standard deduction at two times the single amount for married couples filing jointly (this increases the standard deduction from $7,950 to $9,500 for couples), and (2) setting the top 15% bracket threshold at two times the single amount for couples (this increases the top amount in the 15% bracket from $47,450 to $56,800)."

- "Expanding the income threshold of the new 10% rate from $12,000 for couples to $14,000."

- "Accelerating all of the marginal rate cuts to January 1, 2003 (the new rates are: 10%, 15%, 25%, 28%, 33% and 35%)."