RETURN OF THE TAX CUTTER: BUSH PART II
November 4, 2004
President Bush has a full agenda of domestic priorities and his re-election is certain to shape, and in some cases perhaps reshape, Americans' tax-planning, health-care and savings strategies, says the Wall Street Journal.
Here's a look at what the election means for individual finances in five areas.
- The current top tax rate of 15 percent on dividends and capital gains is likely to be maintained, as is the top federal income-tax rate of 35 percent; Bush is likely to push to make those tax cuts permanent.
- Bush is expected to press for permanent repeal of the federal estate tax, now set to disappear in 2010 but then reappear in 2011.
- Bush's proposal to revamp Social Security could allow individuals to direct some of their payroll taxes into retirement accounts where they could potentially earn higher returns, in exchange for scaled-back guaranteed benefits.
- Workers could see their employer-sponsored retirement plans consolidated into a new single plan, known as the Employer Retirement Savings Account.
- Employers will get more incentives to roll out health savings accounts, which allow consumers to set aside pretax funds for future medical expenses.
- New policies resulting from last year's Medicare overhaul are likely to continue intact; seniors can expect a new prescription drug benefit in 2006.
- The tax advantages of 529 college-savings plans are likely to be extended; Bush's 2001 tax law made qualified withdrawals on earnings tax-free, but those benefits are scheduled to expire in 2010.
- Students who qualify for Pell grants could get an additional $1,000 in their first year of college if they meet certain requirements.
- Expect higher oil prices, at least in the short term, since Bush supports continuing to fill the Strategic Petroleum Reserve.
- Bush isn't likely to demand strict new fuel-efficiency rules or big new fuel taxes.
Source: "What to Expect In Bush Part II: Agenda Includes Extension Of Tax Relief, Renewed Push For Private Savings Accounts," Wall Street Journal, November 4, 2004.
For WSJ text (subscription required) http://online.wsj.com/article/0,,SB109951788959763993,00.html
Browse more articles on Tax and Spending Issues