The Bush Plan

29 Pages 7291 Words

ose reductions to 2006 levels.

2003 2004-2005 2006-2010
38.6% 37.6% 35%*
35% 34% 33%
30% 29% 28%
27% 26% 25%
15% Same Same
10% Same Same


* Even if Bush proposes accelerating the reductions for the top tax bracket, experts expect this proposal will be the toughest to pass into law.


But some experts, such as Andy Laperriere, managing director of the International Strategy and Investment Group, a broker-dealer specializing in economic research, believe Bush may compromise on the rate reduction for the top tax bracket (currently 38.6 percent) if it will help him get his plan passed through Congress more quickly by appeasing critics who argue his tax cuts favor the rich. In addition, Bush proposed that Congress raise the amount of income that applies to the 10 percent income tax bracket to levels originally planned for 2008. That means this year up to $14,000 of income for joint returns would be taxed at the 10 percent rate (up from $12,000) and up to $7,000 of income for single filers would be assessed at the 10 percent rate (up from $6,000). The $2,000 difference for married filers ($1,000 for single filers) is currently taxed at 15 percent. The change would let you pocket the 5 percent difference. So, for example, if you're married filing jointly you'd save $100 (that's 5 percent of the $2,000 difference between $12,000 and $14,000). Eliminating taxes on dividend income If Stock 'x' pays $5 a year per share in dividends and you pay $100 for the stock, you're getting a 5% yield. But those dividends are taxed at income tax rates -- if President Bush's proposal to eliminate the dividend tax goes through, those payments will be much more valuable. Use this calculator to estimate the gains for a stock holding.


Tax-free Dividends:How much would you gain? Shares
Stock price
Dividend yield
Federal tax rate



Current ...