Update - Bush Calls for "Bold" Tax Cut
July 7, 2008 - 7:25 PM
1st write-thru; includes reaction from ATR, SBSC and Steve Forbes
(CNSNews.com) - Texas Republican Governor George W Bush Wednesday unveiled what his campaign calls a "bold approach to tax cuts," one that focuses on raising the standard of living to lower income families while also relieving the tax burden on those who already pay the heaviest proportion of taxes - the wealthy.
Bush's proposed $483 billion tax cut over five years, is based on conservative fiscal assumptions and estimates, according to campaign aides, while leaving Social Security funds untouched. Bush also plans to avoid spending $100 billion of what his economic advisors anticipate will be a five-year surplus of $586 billion.
"It is not just the amount of taxes that matters, it's also what the economists call a taxpayer's marginal rate - the taxes we pay on every extra dollar we earn," Bush told the luncheon crowd at the Greater Des Moines Chamber of Commerce. "That rate determines the incentives to work."
Americans for Tax Reform President Grover Norquist lauded Bush's plan for the reduction of the marginal income tax rate and its effect on American families.
"Overall, the marginal income tax rate on low-income families will fall by over 40 percent, and six million Americans families - one in five taxpaying families with children - will no longer pay any income tax at all."
"Governor Bush's plan has five priorities: Increasing access to the middle class for hard-working families, treating all middle class families more fairly, encouraging entrepreneurship and growth, promoting charitable giving and education, and allowing seniors to work without penalty," Norquist concluded.
Karen Kerrigan, Chairman of the Small Business Survival Committee hailed Bush's plan as "great for small businesses owners. "Bush's plan encourages entrepreneurship and growth by capping the top marginal tax rate at 33 percent, eliminating the death tax, and making the research and development tax credit permanent."
Steve Forbes, Republican presidential candidate, in Washington Wednesday to address the Republican Jewish Coalition, reacted to Bush's tax plan this way: "It's very disappointing. It's Washington politics as usual. George W Bush's economic plan is a missed opportunity. Compared to my flat tax plan, Bush's plan is a 'mini-me' tax cut."
"I want to give tax cuts now, not phase them in over umpteen years. Further, Bush's proposal gives into the ground rules of those that are hostile to tax cuts by utilizing static analysis. He's thrown in the towel before the coin toss," said Forbes.
Advisors to Bush, including economic professors and former White House officials, contend that their plan allows "one in five taxpaying families with children" or six million families to eventually pay no income tax at all.
Under Bush's proposal, a family of four earning $35,000 a year will receive a 100 percent income tax cut; a family of four earning $50,000 a year will receive a 50 percent tax cut and a family of four earning $75,000 a year will receive a 25 percent income tax cut.
"It reserves all the Social Security surplus for Social Security itself. None of it will be used either for new spending or tax reductions," Bush said. "My plan balances the budget. It funds needed priorities, including defense and education. It reduces the national debt. And it ensures that the excess - the rest of the surplus - is returned to the American people, who earned it and deserve it."
Bush's plan focuses on cutting marginal tax rates, in an attempt to help people raise their standard of living. His plan would replace the current five-rate tax structure of 15, 28, 31, 36 and 39.6 percent with four lower rates of 10, 15, 25 and 33 percent.
Text of speech