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February 28, 2001

Chairman Thomas Unveils Economic Growth
and Tax Relief Act of 2001

WASHINGTON - Chairman Bill Thomas (R-CA) today announced his Chairman’s mark for the first tax relief legislation to move through the House of Representatives. Highlights of the plan are attached, and a Joint Tax Committee description is available on their website at http://www.house.gov/jct. The Economic Growth and Tax Relief Act of 2001 will provide approximately $958 billion over 10 years in tax relief.

“Everyone who pays income taxes - from the person who pays one dollar to the person who pays thousands in taxes - will get the same tax break this year. This plan is fair, this plan is equitable. We’re pursuing this responsible path so that American taxpayers can get more relief faster. No one should pay more than one-third of their income to the IRS in taxes. By moving quickly, our aim is to have both monetary and fiscal policy pull this economy out of this nose-dive,” said Chairman Thomas.

The Ways and Means Committee will meet to mark up the Economic Growth and Tax Relief Act tomorrow, Thursday, March 1^st, at 10:00 am in 1100 Longworth.

Highlights of H.R. 3 include:

• Provides immediate tax relief by reducing the current 15 percent tax rate on the first $12,000 of taxable income for couples ($6,000 for singles). A new 12 percent rate would apply retroactively to the beginning of 2001 and also for 2002. The rate would be reduced even further to 10 percent as follows: 11 percent in 2003 through 2005 and 10 percent in 2006.

• In accordance with President Bush’s income tax rate reductions, the plan reduces other income tax rates and consolidates rate brackets. By 2006, the present-law structure of five income tax rates (15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent) would be reduced to four rates of 10 percent, 15 percent, 25 percent and 33 percent.

• Begins to address the growing problem of the alternative minimum tax by repealing the current-law provisions that offset the refundable child credit and the earned income credit by the amount of the alternative minimum tax.

• The reduction in the 15 percent bracket alone provides a tax reduction of up to $360 for couples in 2001 ($180 for singles), increasing to as much as $600 for couples in 2006 ($300 for singles).

• According to the non-partisan Joint Committee on Taxation, savings to taxpayers over ten years would be $958 billion.

Prepared by the Committee on Ways and Means Tax Staff

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