FROM THE OFFICE OF PUBLIC AFFAIRS

In 2003, 92 million taxpayers would receive, on average, a tax cut of $1,083 under the economic growth plan.
• 69 million women would see their taxes decline, on average, by $1,289.
• 46 million married couples would receive average tax cuts of $1,716.
• 34 million families with children would benefit from an average tax cut of $1,473.
• 6 million single women with children would receive an average tax cut of $541.
• 13 million elderly taxpayers would receive an average tax cut of $1,384.
• 23 million small business owners would receive tax cuts averaging $2,042.
• 3 million individuals and families would have their income tax liability completely eliminated by the Act.

Each of the provision in the economic growth plan will benefit millions of taxpayers.

• Accelerating the 2004 and 2006 rate cuts in 2003 would provide 28 million taxpayers with an average tax cut of $1,100.
• Accelerating the expansion of the 10 percent rate bracket would reduce taxes for 69 million taxpayers, on average, by $75.
• Enacting marriage penalty relief in 2003 would reduce taxes for 35 million married couples by an average of $574.
• Increasing the child tax credit to $1,000 in 2003 would provide 26 million families with an average tax cut of $623.
• If the tax on dividend income was eliminated, 26 million taxpayers with dividend income would receive an average tax cut of $704.  Among those with tax cuts would be 7 million elderly taxpayers whose taxes would decline, on average, by $1,252.

Accelerating the reduction in the top marginal rate scheduled to take effect in 2006 (to 35%) to 2003 would help small businesses.

• Owners of flow-through entities, including small business owners and entrepreneurs, comprise more than two-thirds (about 500,000) of the 750,000 tax returns that would benefit from accelerating the reduction in the top tax bracket scheduled for 2006 to 2003.
• These small business owners would receive 79% (about $10.4 billion) of the $13.3 billion in tax relief from accelerating the reduction in the top tax bracket to 35% from 2006 to 2003.

Background

This analysis is based on the following provisions:
• Acceleration of the 2004 and 2006 rate cuts to 2003.
• Reduction in marriage penalties through acceleration of increases in standard deduction from 2009 to 2003 and width of 15 percent rate bracket for joint filers from 2008 to 2003.
• Acceleration of the increase in the width of 10 percent rate bracket for single and joint filers from 2008 to 2003.
• Acceleration of the increase to $1,000 in the child tax credit from 2010 to 2003 (except for advanced rebate).
• 100 percent dividend exclusion.
• An increase in the alternative minimum tax (AMT) exemption level.

Office of Tax Policy
January 6, 2003