http://www.whitehouse.gov/news/reports/taxplan.html
The President's Agenda for Tax Relief

"These are the basic ideas that guide my tax policy: lower income taxes for all, with the greatest help for those most in need. Everyone who pays income taxes benefits — while the highest percentage tax cuts go to the lowest income Americans. I believe this is a formula for continuing the prosperity we've enjoyed, but also expanding it in ways we have yet to discover. It is an economics of inclusion. It is the agenda of a government that knows its limits and shows its heart."

— President George W. Bush

 

Executive Summary

The President has proposed a bold and fair tax relief plan that will reduce the inequities of the current tax code and help ensure that America remains prosperous. This tax relief plan promotes the values that make the American economy second to none -- access to the middle class, family, equal opportunity, and the entrepreneurial spirit. This plan will reduce taxes for everyone who pays income taxes, and it will encourage enterprise by lowering marginal tax rates.

Under the President’s tax relief plan, the typical American family of four will be able to keep at least $1,600 more of their own money.

Over the past several months, the economy has slowed dramatically. President Bush’s tax cut will give the economy a timely second wind by placing more money in the hands of consumers and entrepreneurs. President Bush also understands that, over the long run, wealth is created by hard-working, risk-taking individuals, not government programs. Countries with low taxes, limited regulation, and open trade grow faster, create more jobs, and enjoy higher standards of living than countries with bigger, more centralized governments and higher taxes. The United States has led the way in economic performance over the last century because America is a freer country. If people are given the freedom to create, they do. If people are given a stake in the outcome, they succeed.

President Bush’s tax relief plan reflects this basic trust in the American people and confidence in the American ideal by increasing tax fairness and enhancing the performance of the economy. It includes:

• Replacing the current tax rates of 15, 28, 31, 36, and 39.6 percent with a simplified rate structure of 10, 15, 25, and 33 percent (see Appendix for rate schedule);

• Doubling the child tax credit to $1,000 per child and applying the credit to the Alternative Minimum Tax (AMT);

• Reducing the marriage penalty by reinstating the 10 percent deduction for two-earner couples;

• Eliminating the death tax;

• Expanding the charitable deduction to non-itemizers; and Making the Research and Experimentation (R&D) tax credit permanent.