MIDDLE-CLASS TAX CUTS EXTENDED
September 24, 2004
Congress last night passed legislation extending some of President Bush's most popular middle-class tax cuts. The bill totals $146 billion in tax cuts and was crafted by House Ways & Means Committee Chairman Bill Thomas (R-Calif.) and Republican leaders in the House and Senate, led by Senate Finance Committee Chairman Sen. Charles E. Grassley (R-Iowa).
Bush wants to make the tax cuts permanent, not just extended.
At its heart, the package would extend three popular middle-class tax breaks affecting 94 million Americans:
- It would keep the per-child tax credit at $1,000, instead of letting it drop to $700, for the next five years.
- It would continue the expanded 10 percent tax bracket for six years, through 2010.
- It would extend "marriage-penalty" relief for four years.
The bill effectively extends all three breaks through 2010. The House Ways and Means Committee estimated that without these changes, families would face $109 billion in tax increases in the next 10 years.
In addition to its three main provisions, the bill also would provide a one-year freeze on the number of middle-class taxpayers who have to pay the alternative minimum tax, and it would provide a few extra tax breaks to families who have a military parent fighting in a combat zone.
The package also contains $13 billion for one-year extensions of roughly 20 business-related tax provisions, including a tax credit for donating computers, a tax break for research and development and a $250 tax deduction for teacher classroom expenses. These are routinely extended every year.
Source: Amy Fagan, "Congress extends Bush tax cuts for middle class," Washington Times, September 24, 2004.
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