Read His Lips? George W. Bush Pitches Lower Taxes

By Susan Jones | July 7, 2008 | 8:25 PM EDT

( - The campaign trail leads George W. Bush to Des Moines, Iowa today, where he will deliver a major economic speech - complete with a pitch for lower income taxes and fewer marginal tax rates.

Bush aides told wire services the candidate wants to eliminate the top marginal tax rate of 39.6 percent, which the highest earners (making more than $283,150 in adjusted gross income) now pay. That 39.6 percent bracket would drop to 33 percent, while the lowest tax bracket would drop from 15 percent to 10 percent under Bush's five-year plan.

Bush aides said the $484 billion tax package is likely to become a centerpiece of Bush's presidential campaign. The candidate reportedly will say, "The most important thing is to reduce marginal income tax rates for everyone."

By way of contrast, publisher Steve Forbes is running on a promise to abolish the income tax system entirely, replacing it with a flat 17 percent rate for everyone. Democrats, meanwhile, attack Republican tax-cut plans as irresponsible raids on the current budget surplus.

According to a Bush aide quoted by wire services, there's something for everyone in the Bush tax plan:

For parents of minor children, Bush will propose doubling the child tax credit from $500 to $1000 per child. And when it comes to education, parents would be allowed to invest $5,000 per child (up from the current $500) in tax-exempt education savings accounts, to be used for expenses starting in kindergarten all the way through college.

For married couples, he would reduce the so-called "marriage penalty" by restoring a 10 percent deduction for two-earner families.

For senior citizens, Bush would abolish the earnings limit for retirees who work. Right now, retirees earning more than the limit begin to lose retirement benefits. And for heirs and estate planners, he would eliminate death taxes over eight years.

The tax credit for research and development would become permanent, and the estimated 80 million taxpayers who do not submit itemized tax returns would be allowed to claim deductions for charitable contributions.

Looking at the numbers, the Bush aide said a family of four earning $35,000 a year would pay no income tax, under the Bush plan. A family making $50,000 would receive a 55 percent cut of $1,900. A family with income of $75,000 would get a 25 percent cut of $2,500.

Bush will outline his tax plan later today in a speech before the Des Moines Chamber of Commerce. His speech comes one day before Bush joins his GOP rivals for what will be his first "presidential debate" in New Hampshire.