Roth Unveils Bipartisan Tax Cut Plan
WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today unveiled a ten year $792 billion tax cut plan that will significanly reduce taxes for millions of American families and individuals. At a press conference today, Roth delivered the following statement:
"Today I'm unveiling a broad-based tax cut plan that will benefit nearly every working American. This plan will provide families and individuals with the tax relief and resources they need to meet the financial challenges they face every day. And it embodies objectives shared by Republicans, Democrats and the President.
"The cornerstone of this tax cut package is a reduction of the baseline 15% tax bracket to 14%, and a provision that will drop millions of taxpayers -- currently in the 28% tax bracket -- into the new 14% bracket. This has already found strong bipartisan support in legislation put forward by Senators Coverdell and Toricelli.
"It will result in reduced taxes for Americans in all tax brackets and achieve a savings of over $450 a year for a middle-income family of four.
"My plan also eliminates the marriage tax penalty for two income families by allowing each spouse to file as a single taxpayer. And it keeps the Alternative Minimum Tax from biting middle income families, permitting them to take the full tax credits and exemptions to which they are entitled.
"Without this relief, soon millions of American families will not be able to receive the full benefits of their personal exemptions, their $500 child tax credits, and the Hope Scholarship tax credit.
"Beyond this broad based relief, my tax cut plan addresses some of Americans biggest financial challenges. It enhances retirement savings by expanding IRAs and 401(k)'s. It makes health care more affordable for the self employed as well as for employees whose employers do not provide, or only pay a small portion of, their employee's health insurance.
"It makes saving for college easier by allowing students and parents who use prepaid college tuition plans to save with no taxes on the savings build up.
"The tax cut provisions in this bill are built on shared objectives. This is a tax cut package that can be embraced by members on both sides of the political aisle. With the President's help, we can work together to provide significant tax relief for all Americans ."
Summary
Roth's proposal will:
Cut the baseline income tax bracket from 15% to 14%, and drop millions of taxpayers currently in the 28% bracket into the new 14% bracket. This reduction in the baseline income tax will reduce income taxes across the board for nearly every taxpayer, regardless of income or marriage/family status.
Examples:
• Taxpayers in the 15% tax bracket, would receive a tax cut of approximately 7%.
• A middle income family of four would receive a tax cut of $450.
• A middle income single person would receive a tax cut of approximately $250.
Eliminate the marriage penalty by allowing married couples to file joint returns as if they were single taxpayers, thus reducing their tax burden.
Get rid of the AMT for middle income families by ensuring that they will receive the full tax benefits for which they are eligible.
Increase the IRA Dollar Limit to $5,000 per year. In addition,this limit will be adjusted annually for cost of living increases, in $100 increments.
Eliminate income limits on IRA and Roth IRA contributions.
Increase 401(k) and 403(b) contribution limits by 50%; increase 457 and SIMPLE annual contribution limits by a comparable amount.
Create Roth 401(k) or 403(b) Plan. The bill provides that companies can give participants in 401(k) plans and 403(b) plans the opportunity to contribute to these plans on an after-tax basis, with the earnings on such contributions being tax-free when distributed, like under the Roth IRA.
Allow people close to retirement age to save more by increasing the amount that those 50 and older can contribute to an IRA, 401(k) plan or 403(b) plan by 50% of the underlying plan contribution limitation.
Make employer retirement plans simpler, more portable, and more accessible to employees.
Make education more affordable by allowing parents to save tax free in qualified tuition plans.
Reduce the cost of child care by enhancing tax benefits for middle income parents through a modification of the dependent care tax credit.
Extend health insurance to millions of the uninsured by making health insurance fully deductible for everyone not eligible for employer-subsidized health insurance
Make long term care insurance fully deductible for everyone not eligible for employer subsidized long term care insurance
Allow long term care insurance to be part of an employer cafeteria plan.
Allow an extra exemption to caretakers of elderly family members.
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