WASHINGTON – Republicans keep touting the $1.35
trillion tax cut as the biggest in 20 years. That’s
misleading. It’s the biggest promise in 20
years.
President Reagan, without the benefit of a budget
surplus, served taxpayers the whole enchilada in three
years. President Bush, in spite of record surpluses,
stretches his benefits over 10 years, with the lion’s
share loaded in the out years – when he’s out of
office, along with most Republican lawmakers if voting
trends continue.
So don’t go spending your tax refund just yet.
Middle-income folks will have to wait until 2006 to
get any substantial relief in the tax rates they pay.
It will take five years to drop the 28-percent bracket
to 25 and the 31-percent bracket to 28.
Those affected by the top rate of 39.6 percent – including many small businesses, from mom-and-pop stores to independent contractors to limited partnerships – won’t see any relief until 2006, when the rate falls to 35 percent (still short of wiping
out Clinton’s tax hike).
More than 22 million U.S. businesses file as
individual taxpayers. Most of us work for them, not
corporations. They are America’s jobs engine. Yet the
Bush tax cut essentially ignores them – even as
layoffs mount.
And just as they finally get relief, the alternative
minimum tax, which kicks back in by 2005, steals it
away.
If you’re a parent, you won’t see the child tax credit
doubled to $1,000 until 2010.
Relief from the marriage penalty also was oversold. It
won’t be fixed until 2009.
The death tax is gradually phased out and doesn’t
disappear entirely until 2010. Then it reappears in
2011.
Savers looking to shelter their income from taxes will
also have to mark their calendars.
They won’t be able to contribute the higher annual
limit of $5,000 to their IRA until 2008. And they’ll
have to wait until 2006 to take advantage of the new
$15,000 maximum contribution to their 401(k).
What’s worse, writing all these IOUs just clutters up
the already complicated IRS code. The bill makes 441
changes in the tax law and adds 14 new sections.
Read my lips: This is no way to cut taxes.
