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NEWS
FROM THE COMMITTEE ON WAYS AND MEANS
FOR IMMEDIATE RELEASE Contact: Trent Duffy or Greg Crist
March 8, 2001 (202) 225-8933
House Passes Plan Giving Americans
Broad-Based Income Tax Relief
Permanent Rate Reduction is "Heart"
of President’s Tax Relief Package, Chairman Says
Economic Growth and Tax Relief Act Passes Congress by
230-198 Vote
WASHINGTON - The House of Representatives today passed the Economic
Growth and Tax Relief Act of 2001, a plan giving Americans who pay income
taxes real relief as early as this year. The bill passed by a vote of 230 to
198 with 10 Democrats voting in favor of the plan. The Economic Growth and Tax
Relief Act of 2001 will provide approximately $958 billion over 10 years in
income tax relief. Highlights of the plan follow, and a Joint Committee on
Taxation description is available on its website at www.house.gov/jct.
"Today, the House of Representatives passed the heart of President
Bush’s tax relief plan – permanent reduction of individual income tax
rates. Hardworking Americans are paying more in income taxes than they should
or need to pay. No one, no matter their income, should send more than
one-third of their income to the IRS in taxes. By moving quickly, our hope is
to have both monetary and fiscal policy pull this economy out of its
nose-dive," said Chairman Thomas.
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).
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