President George W. Bush's
Tax Relief Plan, how much of a gamble is it?
Some of the dynamics of Pres. Bush's tax relief are as follows: Replacing the current tax rates with a simplified rate structure; Doubling the child tax credit to one thousand dollars per child and applying the credit to the Alternative Minimum Tax (AMT); Reducing the marriage penalty by reinstating the ten percent deduction for two-earner couples; Eliminating the death tax; Expanding the charitable deduction to non-itemizers; Also making the Research and Experimentation (R&D) Tax credit permanent. President Bush comments on his proposal "My tax plan is not just about productivity, it is about people… A tax plan must apply market principles to the public interest… to make life better for the average men, women and children." (See Graph 1a, for details)
An interest group in favor of the president's plan is Americans for Tax Reform (ATR), their mission statement states "The government's power to control one's life derives from its power to tax. We believe that power should be minimized." ATR has lobbied and gained the support of
two hundred U.S. Representatives and forty-one U.S. Senators, by signing ATR's pledge. All of the Republican candidates for President have signed a pledge to this as well. ATR has not been able to gain any support from any Democratic candidates for presidents.
Interest groups against the lift of the death tax argue, that despite framing the estate tax as an abusive measure targeted at small business owners and family farms, and proponents of terminating the estate tax are attempting to shelter the assets of extremely wealthy constituents. Not only does it more evenly distribute aggregated wealth through taxation means, tax incentives included in the current estate tax model encourage increased giving to charitable organizations. Considering federal budget surplus projections a…