Bush Era Tax Cuts

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I.Introduction
The phrase Bush tax cuts refers to changes to the United States tax code passed originally during the presidency of George W. Bush, he passed two controversial bills into law. While each act has its own legislative history and effect on the tax code, the 2003 act amplified and accelerated aspects of the original 2001 act. Since 2003, the two acts have often been spoken of together, especially in terms of analyzing their effect on the U.S. economy and population and in discussing their political ramifications. Both laws were passed using controversial Congressional reconciliation procedures. In terms of, should the Bush era tax cuts be continued? There are positives and negatives associated with the two controversial bills, along with background information, but continuing the tax cuts will increase the deficit as well as provide majority of tax breaks to high income families and continue putting a burden on the lowest 20% of income families. II.Economic Growth and Tax Relief Reconciliation Act

In 2001 President George W. Bush signed a tax bill into law, The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) barely made it through Congress as a budget reconciliation measure, the only way it could be protected from a Democratic filibuster. The Economic Growth and Tax Relief Reconciliation Act of 2001 was a controversial piece of tax legislation in the United States by President George W. Bush. It is commonly known by its abbreviation “EGTRRA”, and sometimes also known simply as the 2001 act, but is more commonly referred to as one of the two "Bush tax cuts". When President Bush took office, “the highest earners in the country were taxed at 39.6 percent of their normal earned income, 38.6 percent on dividend income and 20 percent on long-term capital gains like investments” (Roos). Soon after that, “Congress responded with a bill that lowered tax rates in all income tax brackets by 3 to 5 percent, created a new 10 percent tax bracket for the lowest-earning households, doubled the child tax credit, erased the "marriage penalty" and blunted the impact of the estate tax. Since the Senate didn't have the votes to pass these cuts as a regular bill, the measure was crafted as a budget reconciliation, which can't be filibustered. However, it did come with an expiration date. No budget reconciliation can add to the federal deficit for more than 10 years, so the tax cuts included a "sunset clause" that made these cuts revert to 2001 levels at the end of 2010” (Roos). “The Economic Growth and Tax Relief Reconciliation Act of 2001 generally reduced the rates of individual income taxes as well. Areas effected included; “a new 10% bracket was created for single filers with taxable income up to $6,000, joint filers up to $12,000, and heads of households up to $10,000, the 15% bracket's lower threshold was indexed to the new 10% bracket, the 28% bracket would be lowered to 25% by 2006, the 31% bracket would be lowered to 28% by 2006, the 36% bracket would be lowered to 33% by 2006, the 39.6% bracket would be lowered to 35% by 2006” (Roos). III.Jobs and Growth Tax Relief Reconciliation Act

In 2003, President Bush signed The Jobs and Growth Tax Relief Reconciliation Act of 2003. This made a lot of changes to the first one, “Among other provisions, the act accelerated certain tax changes passed in the Economic Growth and Tax Relief Reconciliation Act of 2001, increased the exemption amount for the individual Alternative Minimum Tax, and lowered taxes of income from dividends and capital gains. The 2001 and 2003 acts are known together as the "Bush tax cuts". JGTRRA accelerated the gradual rate reduction and increase in credits passed in EGTRRA. The maximum tax rate decreases originally scheduled to be phased into effect in 2006 under EGTRRA were retroactively enacted to apply to the 2003 tax year. Also, the child tax credit was increased to what would have been the 2010 level, and "marriage penalty" relief...
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