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Front Page » July 8, 2003 » Local News » State, national watch dog groups highlight latest federal...
Published 4,475 days ago

State, national watch dog groups highlight latest federal tax relief bill

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Americans have experienced 19 significant federal tax cuts since the end of World War II.

Congress implemented the latest tax breaks with the passage of the 2001 reconciliation bill, the 2002 job creation-workers assistance act and the 2003 relief legislation, pointed out the United States Treasury Department.

The $350 billion package enacted in 2003 will lower the federal taxes paid by all U.S. citizens during the next 10 years.

The plan will accelerate the 2001 relief provisions while dropping the top rate of taxation on dividend income from 38.6 percent to 15 percent and lowering the top rate on capital gains from 20 percent to 15 percent, reported the Americans for Tax Reform.

In addition, the 2003 legislation allows increased tax-free capital investments by small businesses and bonus depreciation on investments made from 2003 through 2005.

The 2003 bill calls for immediately phasing in the marginal rate cuts scheduled at later dates in the June 2001 plan, including expanding the 10 percent tax bracket in 2003 and 2004 rather than waiting until 2008 to implement the change.

The act moves the endpoint of the 10 percent tax bracket from $12,000 to $14,000 for married couples and from $6,000 to $7,000 for single taxpayers.

Pursuant to the 2003 legislation, the reductions in federal income tax rates in excess of 15 percent scheduled for 2004 and 2006 will be accelerated to 2003.

The action will reduce the rates to 25 percent, 28 percent, 33 percent and 35 percent from 27 percent, 30 percent, 35 percent and 38.6 percent respectively.

The bill also accelerates the reduction of the marriage penalty and increase in the child tax credit.

Investors and shareholders currently comprise 52 percent of all American families and 70 percent of the registered United States voters casting ballots in the 2002 mid-term elections.

The bill will cut the highest tax rate on dividend income from 38.6 percent to 15 percent and capital gains from 20 percent to 15 percent, indicated Americans for Tax Reform.

Conservative estimates suggest that the move will increase the stock market by 6 percent to 20 percent, spurring the U.S. economy and benefiting all Americans - not just the rich, indicated the Utah Taxpayers Association.

Research conducted by the National Taxpayers Union Foundation determined that the federal government's definition of rich includes more than millionaires.

In 2000, the Internal Revenue Service's top quarter of earners started at $55,000 while the wealthiest one-tenth began at $92,000.

In some portions of the U.S., $92,000 amounts to an upper middle-class lifestyle.

Americans earning $92,000 includes the combined teacher salaries of a Utah couple with master's degrees and 14 years experience in Jordan School District, pointed out the state taxpayers association.

The fact that 52 percent of all U.S. households currently hold stock counters the argument that the proposal to end double taxation of dividends benefits only wealthy Americans added the Utah association.

The most recent statistics compiled by the Internal Revenue Service confirmed that the top one-quarter of Americans earning $55,000 or more accounted for 84 percent of the total federal income tax collections during 2000.

The top one-half paid 96 percent of the total amount and the top one-tenth of wage-salary earners in the U.S. shouldered the lion's share or 67 percent of the federal income tax burden.

Varying levels of income brackets are disproportionate to the percentages of the federal income taxes collected, noted the Utah association.

Americans grossing $92,000 or more annually accounted for approximately one-half of the total adjusted gross income, but paid two-thirds of the taxes in 2002.

The trend continued up the income scale, but reversed on the way down.

Therefore, wealthy Americans are paying more than a fair share of federal income taxes, concluded the Utah association.

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