May 16, 2003 04:19 PM | Permalink |
The tax cut plan approved by the Senate late last night offers the best-off one percent of Americans a $69,000 tax reduction over the next four years. That’s two-thirds more than the bill reported by the Senate Finance Committee on May 8. The key change in the bill is a vastly expanded dividend tax break, which passed the Senate by a 51-50 vote, with Vice-President Dick Cheney breaking the tie.
Assuming that the bill’s supposedly temporary measures are actually extended past their alleged “sunset” dates, the bill is likely to cost close to a trillion dollars over the upcoming decade — almost three times the bill’s jokingly advertised cost of $350 billion. Most notably, extending the dividend exemption past 2006 would raise its ten-year cost by at least $250 billion and extending the bill’s alternative minimum tax relief past 2005 would cost more than $300 billion over the same period.