The $69 billion tax cut bill that President Bush signed this week tripled tax rates for teenagers with college savings funds, despite Mr. Bush's 1999 pledge to veto any tax increase. Let's Talk.
Under the new law, teenagers age 14 to 17 with investment income will now be taxed at the same rate as their parents, not at their own rates. Long-term capital gains and dividends that had been taxed at 5 percent will now be taxed at 15 percent. Interest that had been taxed at 10 percent will now be taxed at as much as 35 percent. The bill raised taxes and tax rates on teenagers with college savings funds.
In response to a question about the tax increase on teenagers in the new legislation, the White House issued a statement Friday that made no reference to the tax increase, but recounted the tax cuts the administration has sponsored and stated that President Bush had "reduced taxes on all people who pay income taxes."
Challenged on that point, the White House modified its statement 21 minutes later to say that Mr. Bush had "reduced taxes on virtually all people who pay income taxes."
Grover Norquist, president of Americans for Tax Reform, told the Times that the increase is "a technical violation of the pledge." The pledge was made to the Republican National Committee.
Bush pledged, "If I were elected president, I will oppose and veto any increase in individual or corporate marginal income tax rates or individual or corporate income tax hikes. . . . I will also oppose any further reduction or elimination of income tax deductions and credits, unless offset dollar for dollar by reducing tax rates."
Mr. Norquist called the bill raising taxes on teenagers with investment income "a technical violation of the pledge" and noted that his group opposes all retroactive tax increases. He pledged to immediately begin a campaign to have the tax increases rescinded.
What in the world are the House, Senate and this President thinking. Did they not know this bill would tripled tax rates for teenagers with college savings funds?
Most important, would Bush have done anything about it if he had not made this pledge and will he reverse it now? What say you America?