Bush’s Tax Cuts, Obama’s, or None? Three Scenarios

The Foundation, a nonpartisan tax research group based in Washington that advocates lower, simplified taxes, has also enumerated specific provisions of the Bush cuts, which included:

• making more married taxpayers eligible for the earned income tax credit (EITC);
• creating the 10% income tax bracket;
• raising the standard deduction for couples;
• increasing the child tax credit; and
• changing five different tax brackets.

The Foundation has created tables to show the difference in taxes among those three scenarios. For example, while there would be no difference between Democratic and Republican plans for taxpayers with income up to $150,000, according to Table 1, for a family with an income of $300,000 and two children, under complete expiration of the cuts, the tax bill would be $76,616; under the Republicans’ plan, it would be $64,971; and under the Democrats’ plan, it would be $68,392. The tax rates under those circumstances would be, respectively, 25.5%; 21.7%; and 22.8%.

The Foundation has also set up a FAQ page for those who wonder about more specific aspects of the tax situation.