congressional budget office bush tax cuts

The 2012 American Taxpayer Relief Act (ATRA) made permanent the tax provisions affecting low- and moderate-income households, but allowed certain tax rate cuts that affected only the highest-income taxpayers to expire, including restoring the top income tax rate to its previous level of 39.6 percent. This agreement reinstated the estate tax starting in 2011, but with a lower tax rate and higher exemption levels, applying only to the wealthiest estates (those worth more than $5 million per person or $10 million per couple, indexed for inflation). Nearly all of the tax cuts were originally scheduled to expire at the end of 2010, but policymakers extended many of their provisions for two years as a part of a budget deal in December 2010. All high-income taxpayers benefitted from the creation of a new 10 percent rate at the bottom, and some high-income married couples benefitted from the “marriage penalty relief” provision. Many higher-income people benefitted from these provisions as well. The third provision was “marriage penalty relief” - a set of changes that reduced taxes for some married couples. Another provision increased the Child Tax Credit from $500 to $1,000 per child and made many low-income working families eligible for the credit. One provision created a new bottom income tax rate of 10 percent for some of the income that was previously taxed at a 15 percent rate.

In addition, the tax cuts included three components that are often referred to as “middle-class” tax cuts. The 20 tax cuts also phased out the estate tax, repealing it entirely in 2010. Ī Based on tax brackets for a married couple in 2010, rounded to the nearest $1,000 Reducing the top marginal tax rates (the tax on each additional dollar of income above a threshold) reduced the average tax rate (total tax liability as a share of total income) for all taxpayers with incomes above those thresholds.

The 20 tax cuts reduced the top four marginal income tax rates (see Table 1), as well as the tax rate on capital gains and dividends. Despite promises from proponents of the tax cuts, evidence suggests that they did not improve economic growth or pay for themselves, but instead ballooned deficits and debt and contributed to a rise in income inequality. High-income taxpayers benefitted most from these tax cuts, with the top 1 percent of households receiving an average tax cut of over $570,000 between 2004-2012 (increasing their after-tax income by more than 5 percent each year). Bush were the 20 tax cuts, often referred to as the “Bush tax cuts” but formally named the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). The biggest tax policy changes enacted under President George W.

Congressional budget office bush tax cuts