The Economic Growth and Tax Relief Reconciliation Act of 2001 approved by the House of Representatives (Passed by the Yeas and Nays: 230 197) save American taxpayers $958 billion over the next 10 years, according to the non-partisan Joint Committee on Taxation. Americans currently pay more in taxes than they spend on food, clothing and housing combined. In year 2001, it will take most Americans more than four months of paychecks to pay their tax burden, a fact that every republican congressman has etched in his mind.
All Republicans are quick to note: This bill reduces taxes for all Americans who pay income taxes, spurs economic and job growth for all taxpayers regardless of what district or county or city or state they reside in and provides an average of $1,600 in tax relief for the average American family (family of four) phased-in over a 5-year period. The $1,600 amount represents the average mortgage payment for almost two months, one year's tuition cost at most community colleges, and the average gasoline costs for two cars for one year. The answer to this from the Democrats: Fiscally irresponsible and rape of the surplus accumulated in the last two terms. Between the two parties, and the bill was pretty much passed along party lines, most American taxpayers suffering through the recent recession.
- Amends the Internal Revenue Code to establish, as of tax year 2001, a 10 percent individual tax bracket for each filing status applicable to the first
- $12,000 ($14,000 for 2008 and thereafter) of taxable income for the married filing jointly category
- $10,000 of taxable income for the head of household category
- $6,000 ($7,000 for 2008 and thereafter) of taxable income for either the filing as unmarried or married filing separate returns categories.
- Phases in reductions, beginning in 2001, of the 28 percent, 31 percent, 36 percent, and 39.6 percent brackets. Reduces each rate by one percentage point annually (with an additional 1.6 percent decrease for the 39.6 percent category), so that for years 2006 and thereafter the rates for each category will be, respectively, 25 percent, 28 percent, 33 percent, and 35 percent.
- Provides for a credit, payable to the extent practicable before October 1, 2001, of up to $600 for the married filing jointly category, $500 for the head of household category, and $300 for those filing a return as either unmarried or married filing separate.
- Repeals, in stages beginning in 2006, the personal exemption phase out, making such repeal fully effective beginning in 2010.
- Repeals, in stages beginning in 2006, the limitation on itemized deductions, making such repeal fully effective beginning in 2010.