| CTJ Analyses of Bush Plan | |
| Revised Analysis of Bush Plan | 8/31/00 |
| Bush Plan and Working Families | 1/15/00 |
| May Analysis of Bush Plan | 5/17/00 |
In early December of 1999, Republican presidential candidate George W. Bush announced a plan for large-scale tax reductions. The plan was clarified and amended in May 2000. The principal components of the Bush plan are:
- A major reduction in personal income tax marginal rates. The 39.6% and 36% rates would drop to 33%, and the 28% and 31% rates would drop to 25%. The 15% tax bracket would be retained, but a new 10% bottom bracket would apply over about a quarter of the range of the current 15% bracket. (These rate reductions are just under half of the total Bush tax cut.)
- The $500 per child tax credit would be doubled and extended to much higher-income families; two-earner couples would get a deduction of up to $3,000; taxpayers who don't itemize deductions could deduct charitable contributions; and a few other personal tax breaks would be provided. (25% of the total Bush tax cuts.)
- The rest of the Bush tax cuts reflects repeal of the federal wealth tax on very large estates (24% of the total tax cut) and tax breaks for corporations (2% of the total).
Distribution and Ten-Year Cost of the Bush Plan's Benefits
A May 17, 2000 CTJ analysis found that three-fifths of the tax cuts from Bush's plan would go to the best-off 10 percent of taxpayers, and that 43 percent of the benefits would go to the top one percent. Over ten years, the Bush plan would reduce federal revenues by $1.6 trillion. Together with increased interest payments on the national debt, the total cost of the plan over ten years would be more than $1.9 trillion, about 90 percent of the projected budget surpluses over the same period not counting Social Security. For more on this analysis, click here.
How the Bush Plan Would Affect Working Families
A January 2000 CTJ analysis, updated in May, 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 would receive only two percent of the Bush plan's tax cuts. To see the full text of this analysis, click here.
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