Background: President Bush’s Tax Cut Plan
[Sorry, the video for this story has expired, but you can still read the transcript below. ]
GWEN IFILL: Tax cut fever has hit Washington. President Bush, who made cutting taxes a central pledge in his campaign, is leading the charge. Today, he invited three families to the White House, launching a week-long string of announcements designed to showcase his plan.
PRESIDENT GEORGE W. BUSH: Under the plan I’ll be sending to Congress later this week, every American who pays income taxes will get tax relief. And the average relief for a family of four with two children will be $1,600. This is real and practical help when, at this time, many Americans need it.
GWEN IFILL: When it is formally unveiled, the White House plan will call for $1.6 trillion in across-the-board tax cuts, spread over ten years. The top income tax rate for individuals and married couples would be slashed from 39.6 percent to 33 percent and the other tax brackets would be reduced from 36 to 33 percent, from 31 to 25 percent, from 28 to 15 percent, and from 15 percent to 10 percent. The president’s plan also calls for eliminating the estate — or inheritance tax– the so-called marriage penalty and for doubling the $500-per-child tax credit. The tax cut, White House officials said, would also take effect retroactively — from the first of the year. But Democrats are also pushing for tax cuts, a smaller plan, closer to $900 billion. The White House proposal, they argue, is based on risky projections and favors the rich.
SEN. TOM DASCHLE: How much are we willing to base this entire economic plan on, on projections that are no better than the weather forecast last night? And finally the imbalance – you know, if you make over $300,000 a year, this tax cut means you get to buy a new Lexus. If you make $50,000 a year, you get to buy a muffler on your used car.
GWEN IFILL: But President Bush said his plan helps all families.
PRESIDENT GEORGE W. BUSH: I’ve heard all the talk about class warfare and this only benefiting the rich. But I think when people take a good hard look at the rate reduction and who benefits, and the fact that our plan erases inequities in the tax code, or eases inequities in the tax code, and that the biggest… the bottom end of the economic ladder receives the biggest percentage cuts, people will come to realize it. I think it’s important to cut all tax rates.
GWEN IFILL: The president also warned Congress today against loading his proposal with additional tax cuts that could drive up its cost.