Washington (May 17, 2004) -- Members of the House of Representatives approved a bill that moved the U.S. a step closer to making the 10 percent bracket permanent.
H.R. 4275, the 10 Percent Tax Bracket Extension and Permanency Act, passed the House by a 344-76 vote. The bill, sponsored by Rep. Pete Sessions, R-Texas, would preserve the 10 percent tax bracket, which was created by President Bush's 2001 tax cut, and expanded in 2003. The bracket applies to the first $7,000 in taxable income for single taxpayers and double that amount for married couples.
If the bill doesn't become law, the 10 percent bracket will shrink by $2,000 next year ($1,000 for singles) and will disappear in 2011. That would push roughly 22 million low-income workers into a higher tax bracket, noted Rep. Paul Ryan, R-Wis., a member of the House Committee on Ways & Means and a supporter of the bill.
Treasury Secretary John Snow lauded the measure, and urged the Senate to "quickly follow suit."
The House legislation would cost $218 billion over 10 years, according to the Joint Committee on Taxation. It is the third bill passed by the House in recent weeks that would extend or make permanent tax cut measures approved by President Bush that are set to expire this year.
House lawmakers recently approved a bill that would lock in marriage penalty relief and another that would extend relief from the alternative minimum tax for another year. Next week, House members will consider H.R. 4359, a measure sponsored by Rep. Jon Porter, R-Nev., that would make permanent the $1000 child tax credit. That credit, which increased from $500 to $1,000 as part of the 2001 and 2003 Bush tax cuts, is set to drop to $700 next year and to $500 in 2011.
-- WebCPA staff
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