{"article":{"id":12144,"heading":"CTJ: $212 Billion House GOP \"Stimulus\" Tax Bill Would Almost Double Bush Tax Cut","author":"Citizens For Tax Justice (CTJ)","created":"2001-10-22 01:42:30","modified":"2005-08-15 00:42:00","last_modified":"Mon, 15 Aug 2005 07:42:00","article":"

Ways and Means Tax Bill Would Almost Double Bush Tax Cuts Over Next Three Years: CTJ Analysis\r\n\r\n\r\n\r\n \r\n\r\n<\/p>
Citizens for Tax Justice , 202-626-3780 <\/td> \tOctober 5, 2001<\/td><\/table>\r\n$212 Billion House GOP \"Stimulus\" Tax Bill Would Almost Double Bush Tax Cuts Over Next Three Years
Benefits Would Be Heavily Skewed To Those With Highest Incomes<\/b>\r\n

\r\nClick here to see this analysis in PDF format.
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The House Ways and Means Committee, on a party line vote, has approved a bill\r\nthat over the next three years would almost double the size of the Bush tax cuts\r\nenacted last May. Officially, the new corporate and individual tax cuts are estimated to\r\ncost $212 billion over the next three fiscal years (and the actual cost is likely to be\r\nconsiderably higher).<\/p>\r\n

A distributional analysis of the bill’s effect in calendar 2002 finds:<\/p>\r\n

  • Forty-one percent of the tax cuts would go the best-off one percent of all\r\ntaxpayers, whose average tax cut in 2002 would be almost $27,000 each.<\/li>\r\n
  • Almost three-quarters of the 2002 tax cuts would go to the best off tenth of all\r\ntaxpayers.<\/li>\r\n
  • Only 7 percent of the tax cuts would go the bottom three-fifths of taxpayers.<\/li><\/ul>\r\n

    Major items in the Ways & Means October 12 “stimulus” tax bill include:<\/p>\r\n

    Corporate tax cuts:<\/b><\/p>\r\n

    • The largest corporate tax loophole under current law—accelerated depreciation—would be almost doubled, at an estimated cost of $109 billion over the next three\r\nyears. Ostensibly, these additional tax subsidies will expire after 2004, but similar\r\n“temporary” measures enacted in the past have typically been routinely extended.<\/li>\r\n
    • The bill would permanently repeal the corporate alternative minimum tax that now\r\ndiscourages corporate tax sheltering and forces some otherwise low- and no-tax large,\r\nprofitable corporations to pay at least something in taxes. In addition, companies that\r\npaid the minimum tax in the past would get an immediate refund of those payments.\r\nThis would officially cost $24 billion over 10 years, and more likely two or three times\r\nthat much due to increased tax sheltering not reflected in the “official” estimate. A large share of this money would go to just a handful of companies, including IBM, General Motors, General Electric, and Chevron Texaco.<\/li>\r\n
    • The bill would make it easier for corporations with “tax losses” to use them to apply\r\nfor refunds of taxes they paid in the past, at a cost of more than $10 billion over the\r\nnext three years. Like the increase in depreciation write-offs, this provision is\r\ntechnically supposed to expire after 2004.<\/li>\r\n
    • An expiring current-law tax shelter for multinational corporations, notably General Electric and the major auto companies, which allows them to\r\nshift taxable profits off-shore through manipulations of interest payments would be\r\nmade permanent. The estimated cost over ten years is $21 billion.<\/li><\/ul>\r\n

      Individual tax cuts:<\/b><\/p>\r\n

      • The top income tax rate on capital gains would be reduced from 20 percent to 18 percent.(1) Assuming no increase in realized gains, this would cut taxes by $10 billion in\r\ncalendar 2002 alone (with three quarters of that going to the top 1%). If as some\r\npredict, realizations go up, then the upper-income tax savings will be even larger.<\/li>\r\n
      • The cut in the former 28 percent tax rate to 25 percent, scheduled to take effect in\r\n2006 under the Bush tax-cut bill enacted earlier this year, would be accelerated to\r\n2002. (Unless changed, under current law the rate will be 27 percent in 2002 and\r\n2003, 26 percent in 2004 and 2005, and 25 percent in 2006 and thereafter.)<\/li>\r\n
      • Individual exemptions from the alternative minimum tax would be temporarily\r\nincreased.<\/li>\r\n
      • The 2001 tax rebates of $600 for couples, $500 for single parents, and $300 for\r\nchildless singles would be extended to about 37 million couples and individuals who\r\ndid not get them or got less than the full amounts. To qualify, a person or couple\r\nmust have filed a tax return for tax year 2000. For those affected, the $13.7 billion in\r\nadditional 2001 rebates would average about $350.<\/li><\/ul>\r\n\r\n\r\n
        Effects of the House Ways &<\/b><\/td><\/tr>
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        \n","contact":"","link":"http:\/\/www.ctj.org\/html\/stimulus.htm","address":"","phone":"","parent_id":0,"mime_type":"text\/html","summary":"The House Ways and Means Committee, on a party line vote, has approved a bill that\r\nover the next three years would almost double the size of the Bush tax cuts enacted last\r\nMay. Officially, the new corporate and individual tax cuts are estimated to cost $212\r\nbillion over the next three fiscal years (and the actual cost is likely to be considerably\r\nhigher).","numcomment":0,"fileurl":"\/uploads\/2001\/10\/stimulus.htm","filesize":"12.9 kibibytes","article_url":"\/news\/2001\/10\/12144.php"},"attachments":[],"comments":[]}