On Feb 8th, President Bush submitted his tax cuts to Congress. Fearing an Economic slowdown creeping up on the American economy, he believes the only solution before him is to put money in the hands of consumers and entrepreneurs. He applauds the sound fiscal and financial policies of the 1980s and sees them as guidelines for his administration. Government has been overcharging the American taxpayers in his views and its time to give those taxpayers a break.
His tax cuts are going to cost the government $1.6 trillion dollars. This is the money that American taxpayers will pocket. His tax plan will help get struggling single mother families on their way to a prosperous future by cutting down marginal tax rates. He will also reduce the number of tax brackets to one less. Instead of five (15%, 28%, 31%, 36%, and 39.6%) there will only be four (10%, 15%, 25%, and 33%). This will mostly effect two classes of people, the poor and the wealthy. Married and filing jointly with income up to $12,000 will be in the 10% (previously 15%) tax bracket. Married and filing jointly with income above $166,500 will be in the 33% (previously 39.6%) tax bracket. The single mother that President Bush keeps reminding us about will have her income (up to $10,000) taxed at 10%. For her any income above this threshold will be taxed at 15%. While the rich lawyer who makes $250,000 one year and then $500,000 the next year will have only a flat tax rate (33%) to deal with.
Under this tax plan, the rich will get richer and they wont be paying higher taxes. While the poor and the struggling single mother would be penalized for making more money. The tax brackets are like four walls that if someone needs to get across has to climb. The poorer you are the more walls you have to climb over. Even though the current tax rates are not that great, they are at least not favoring the rich. Under President Bushs tax plan, the wealthy are definitely going to be better off than the poor are.
The two good things that can come out of this tax plan are the reduction of marginal tax rates that will help all classes of Americans keep more of their money and the slowdown of government spending as less money is deposited in the treasury. The latter will help the economy grow by letting private businesses handle the money and create more jobs.