On March 1st, 2001 close to 2/3 of the members of the House Ways and Means Committee approved a bill to cut tax rates. This bill will now go in front of Congress with high hopes of becoming law. The bill rejected the democrats purposed alternative to President Bushs $1.6 trillion dollar tax cuts package. Democrats wanted to hold back the tax breaks for the rich, while awarding the less wealthy the tax cuts purposed by President Bush. Republicans on the other hand wanted to deal everyone an even hand.
The bill also demonstrates the need for the urgency felt by the Republicans in the capitol to pull the country out of the economic slow down. Even though the purposed tax cuts package wasnt to begin until next year, the bill has lowered the 15% tax rate to 12% for this year and the next; it will gradually be phased in to 10% by 2006.
The other tax rates (28%, 31%, 36%and 39.6%) will be gradually lowered starting next year and completely phased in by 2006.
This bill is called the "The Economic Growth and Tax relief Act of 2001". Its effective after December 31st, 2000.