THE NEW TAX BILL PROPOSAL
Would cut taxes by $330 billion through 2013. Also provides $20 billion to state and local governments for Medicaid and other programs, to be paid over next two years.
-Corporate dividends, capital gains: Would lower the top rate to 15 percent on taxes paid by stockholders on corporate dividends and the taxes on capital gains. Current top rate is 38.6 percent for dividends, 20 percent for capital gains. Lower income people would pay a 5 percent rate on both. The new rates would run through 2007; in 2008, the lower rate would drop to zero. In 2009, today’s current, higher rates would return.
-Personal income taxes: Would accelerate several tax reductions that had been scheduled to occur later this decade. Increase child credit to $1,000 per child, instead of current $600. Highest income tax brackets would be reduced to 35 percent, 33 percent, 28 percent, 25 percent. The lowest, 10 percent bracket would be expanded. For married people filing joint returns, the 15 percent bracket would be expanded and the standard deduction increased. Would prevent more taxpayers from paying alternative minimum tax. Most reductions would last only until 2005.
-Business taxes: Would increase from $25,000 to $100,000 the equipment investment that small businesses can write off. Many companies could depreciate more of their assets sooner.