Regardless of which plan passes (or a compromise of the two), the good news for American taxpayers is that they will be realizing lower tax payments sooner rather than later.
President Bush wants to move up tax rate cuts, currently scheduled for 2004 and 2006, to take effect this year. Because married couples don’t receive twice the standard deduction of a single taxpayer, they move into a higher tax bracket sooner, than they would as two single taxpayers. The marriage penalty was to be gradually eliminated by 2009. The Bush plan would eliminate the penalty now.
The most widely discussed new proposal is the elimination of double taxation on dividends. Currently tax is paid once at the corporate level on earnings used to pay dividends and a second time by the taxpayers who receive the dividend distributions. The stimulus plan advocates elimination of the tax on dividend distributions.
Also proposed is an extension of unemployment benefits and $3,000 in assistance to some unemployed people to pay for job training, child care, or moving expenses.
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