Overview of the George W. Bush Tax Plan

In early December of 1999, Republican presidential candidate George W. Bush announced a plan for large-scale tax reductions. Among the principal components of the Bush plan were:

A reduction in personal income tax marginal rates.

Repealing the federal estate tax.

Increasing the $500 per child tax credit.

Extending permanently the corporate research tax credit.

Allowing a deduction for charitable contributions for non-itemizers.

Allow a deduction for two-earner couples.

A "fact sheet" posted on the Bush web site following the release of the analysis made several claims about the plan's consequences for low-income taxpayers and for the Social-Security and non-Social Security surplus:

The Bush fact sheet claimed that "the Bush tax cuts benefit all Americans, but reserve the greatest percentage reduction for the lowest income families."

A December 1 CTJ analysis found that in fact, more than a quarter of taxpayers would get nothing at all from the Bush plan. The analysis also found that the Bush plan actually gives the smallest tax cuts to the lowest income families and the biggest cuts to the wealthy. To see the full text of this analysis, click here.

Bush estimated that "the projected on-budget surplus is sufficient to finance Governor Bush's tax cuts without dipping into the Social Security surplus."

A February 4, 2000 CTJ analysis found that under realistic assumptions about the growth of federal spending over the next decade, the cost of the Bush tax plan would far exceed official projections of non-Social Security budget surpluses. In fact, the CTJ analysis found, the Bush tax cuts would actually require dipping deeply into the Social Security trust fund, and could exhaust between 41 and 78 percent of the projected Social Security surpluses over this period. CTJ's analysis suggests that the ten-year cost of the Bush plan would be approximately $2.1 billion--more than double the Bush campaign's estimates. To see the full text of this analysis, click here.

Bush claims that "[l]owering... barriers to the middle class is

one of Governor Bush's top priorities" in proposing rate reductions for the middle class.

A January 2000 CTJ analysis provides a detailed look at the impact of the current tax system on moderate-income working families--and examines the changes that would result from the Bush tax plan. The CTJ analysis, focusing on working families with children that currently receive the federal earned income tax credit, found that the Bush plan would reduce marginal tax rates for about 2.9 million of these 13.9 million families. These families receive only 1 1/2 percent of the Bush plan's tax cuts. To see the full text of this analysis, click here.