February 3, 2004
President Bush unveiled a record $2.4 trillion budget Monday. Some of it might even trickle down to you, says the Wall Street Journal.
Among the major proposals:
- The president wants to create two new savings accounts -- each with a $5,000 annual contribution limit -- to encourage millions more Americans to put aside additional savings in tax-advantaged accounts.
- He proposes allowing taxpayers who don't itemize to deduct charitable contributions up to a limit.
- The administration wants to allow people with health-savings-accounts (authorized by the new Medicare prescription drug law) to be able to deduct the premiums they pay for the high-deductible insurance that accompanies an HSA, regardless of whether or not they itemize
Another proposal would slow the rapid growth in the number of Americans snared by the alternative minimum tax, but would be effective only through 2005. The AMT originally was designed to prevent wealthy people from escaping federal income taxes completely.
Now, though, it is hitting many middle-class households. Among those most likely to be affected by this highly complex tax are large families or people who live in high-tax areas, such as New York City and California. The budget doesn't have any long-range solutions to the rapidly growing AMT problem, but Treasury officials say they will study the subject.
Source: Tom Herman, "Bush's Budget: What It Means For Your Wallet," Wall Street Journal, February 3, 2004.
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