President Bush is annoyed and so are the house tax writers. The tax plan approved by the 10 republicans and 4 moderate democrats, members of the Joint Committee on Taxation, on May 15th, 2001 is full of changes. The rich are no longer benefiting so much from the plan and the lower income families have a lower tax rate and cuts than previously presented and approved by President Bush in his proposal and later by the house tax writers.
The democrats are still not happy calling it a fiscally irresponsible proposal. Senate tax cuts is going to cost the taxpayers $1.35 trillion over 11 years instead of the $1.6 trillion price tag that it brought over from the house. The democrats still werenít convinced with the lower price tag. The slower phase in of many tax benefits and cuts has enabled the senate to offer more tax cuts to the lower income families. They have also taken away tax cuts that were benefiting the higher income individuals and families.
The tax rates wontí be effective till 2007, a year after the house had proposed to phase them in. The child tax credit wonít increase to $1000 until 2011, adding five more years to the date 2006 initially approved by the house. And the AMT exemption that was proposed and approved keeping in mind that more people will be hit by it has been pulled back to 2006. There are no proposals on how they are going to deal with it after 2006.
Senate plan does however offer some immediate relief for the lower income families by lowering the 15% tax bracket to 10% starting this year instead of 2006 as proposed by the President and approved by the house. The child tax credit increases to $600 starting this year too.