It is always a good day when people get money for some reason or another, and most income tax payers will be seeing that day soon, due to a $1.35 trillion tax cut plan that President bush signed into law last Thursday. The law, which has a lifetime of nine years, is meant to return the taxpayers’ money to the taxpayers.
Due to this new law, most taxpayers will be receiving a refund in the mail (about $300 for individuals, $500 for single parents and $600 for married couples) from the US Treasury Department. This extra money is a result of the 10% tax rate bracket placed on certain amounts of taxpayers’ income, the exact amount of which depends on the person’s filing status. Starting July 1st, people will also start to see a gradual decrease in the income tax rate and a gradual increase in the child tax credit.
This law not only returns people their money but also puts an end to the estate tax, decrease the pains of the marriage penalty speaking strictly in monetary terms, and allows workers the chance to put away more money in their retirement plans.
This law, which has caused a lot of controversy among government officials while being deliberated, marked an end to the success of the democrats in preventing passage of the many tax relief plans sponsored by republicans. And still, even after the law was passed, tempers flared as critics denounced the President’s understanding of the importance of taxes. Even though Congress made many changes to the original tax relief plan (decreasing the cut from $1.6 trillion to $1.35 trillion) many people are worried about the 11% decrease that will arise in income tax revenue by 2010. Up until recently, many Americans themselves had thought that the surplus should be spent on popular programs, though never canceling out the idea of having the tax cut. However, by looking at the slowing economy and hearing a few words of wisdom from the Chairman of the Federal Reserve, Alan Greenspan, the American people’s support for the plan increased.
With the signing of this plan, President Bush actually fulfilled his campaign promise, something not every president (or government official) always does.