|Citizens for Tax Justice
1311 L Street, NW
|Thursday, Aug. 12, 1999|
CONTACT: Bob McIntyre,
Don't Spend That $160 Tax Cut Right Away
As Republican congressional leaders tour the country this month to tout their tax cut
plan, average American taxpayers should keep a number of things in mind.
Related CTJ Publications:
Finally, there's an additional insult to ordinary taxpayers in the bill. While corporations and wealthy investors will start seeing big tax cuts right away, the tax reductions reserved for the non-rich don't even start to take effect until the year 2001, and are only gradually phased in thereafter.
Thus, under the GOP tax plan, the capital gains tax cut is retroactive to January 1 of this year. The corporate tax loopholes start to take effect in 1999 as well. And the phased-in elimination of the estate tax starts after Dec. 31, 2000. But as for the other provisions:
"The message from GOP congressional leaders is clear," said Citizens for Tax Justice Director Robert S. McIntyre. "If you made your campaign contributions early and often, you'll get big tax cuts right away. But if you're just an ordinary American citizen, then your promised tax cut is not only paltry, it will be delayed for many years."
Dont Spend That $160 Tax Cut Right Away:
How Congressional Republicans Plan to Phase In Their Tax Cuts
|Capital gains tax reduction||100%|
|Corporate tax breaks**||33%||50%||67%||100%|
|Estate tax elimination||||||25%||30%||35%||40%||45%||50%||55%||60%||100%|
|Reduce individual income tax rates|
|15% to 14% (14.5% in 2001 and 2002)||||||50%||50%||100%|
|Other income tax rates minus 1%||||||||||||||100%|
|Increase standard deduction for couples||||||20%||40%||60%||80%||100%|
|Increase dependent care credit||||||27%||27%||27%||27%||27%||100%|
|Increase earned income tax credit for couples||||||||||||||||100%|
|Deduction for health insurance||||||||25%||25%||25%||35%||65%||100%|
|Raise starting dollar amounts for 28% bracket||||||||||||||25%||50%||75%||100%|
*Many provisions are technically supposed to terminate after 2008. That feature is ignored here.
**Some provisions are supposed to terminate in later years.
Source: Joint Committee on Taxation, 8/4/99. Some calculations by Citizens for Tax Justice.
Citizens for Tax Justice, August 12, 1999