Costanzo.org Feature:

Who Gets What When?

Chaos of the 2003 Bush Tax Cut

Costanzo.org current understanding of the 2003 tax cut

2003

2004

2005

2006

2007

2008

2009

2010

2011

For Stock Investors

Dividend Tax Reduction Income Tax Rate to 15%

YES

YES

YES

YES

YES

REVERTS

REVERTS

Low-Income Dividend Reduction

YES

YES

YES

YES

YES

to 0%

REVERTS

Capital Gains Reduction 20% to 15%

YES

YES

YES

YES

YES

YES

REVERTS

For those with very high deductions or other tax breaks

Increases the Alternative Minimum Tax exemption amount by $4,500 for single persons and $9,000 for joint filers for 2003, 2004.

YES

YES

REVERTS

For Small Business Owners

Definition of Small Business increased to $400K from $200K

YES

YES

YES

???

Business Depreciation Reduction allows expensing up to $100K up from $25K

YES

YES

YES

REVERTS

First Year "Bonus" depreciation increases from 30% to 50%

YES

YES

REVERTS

Trucks and sport-utility vehicles weighing more than 6,000 pounds that are used in business qualify for these provisions. Now, unless the SUV costs more than $100,000 it can be written off within a single year.

YES

YES

YES

???

???

???

???

???

???

For Everyone Paying Income Tax

38.5% bracket to 35%

YES

YES

YES

YES

YES

YES

YES

YES

??

35% to 33%

YES

YES

YES

YES

YES

YES

YES

YES

REVERTS

30% bracket to 28%

YES

YES

YES

YES

YES

YES

YES

YES

REVERTS

25% bracket to 27%

YES

YES

YES

YES

YES

YES

YES

YES

REVERTS

15% bracket to % to higher incomes for married

YES

YES

YES

YES

YES

YES

YES

YES

REVERTS

Child Tax Credit increases for $600 to $1000, but is phased out for higher incomes

YES

YES

REVERTS

10% braclet 10% for higher incomes

YES

YES

REVERTS

For Married Couples: Marriage Penalty Reductions

Marriage Penalty Reduction A: Std deduction doubled (200% increase) for married couples in 2 years and then declines

200%

200%

174%

184%

187%

190%

200%

200%

REVERTS

Marriage Penalty Reduction B: the income break point for the 15% bracket doubles (200% increase) for first 2 years for married couples and then declines.

200%

200%

180%

187%

193%

200%

200%

200%

REVERTS

For State Governments

Annual payment for state relief given many unfunded federal mandates.

$10B

$10B

SOURCES:  "A Tax Cut of Varied Proportions"

Washington Post 5/25/03

http://www.washingtonpost.com/wp-dyn/articles/A35969-2003May24.html?nav=hptop_tb

"US Congress approves $350 billion to tax cut proposal"

Arab Times Kuwait 5/25/03

http://www.arabtimesonline.com/arabtimes/business/Viewdet.asp?ID=321&cat=j