Sunday, May 21, 2006

$69 billion tax cut bill raised taxes and tax rates on teenagers with college savings funds

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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 He pledged to immediately begin a campaign to have the tax increases rescinded.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?

7 comments:

Jon said...
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LETS TALK said...

It appears that conservatives don't seem to care that by increase spending and the tax cuts to the rich and big business will put a big burden on our children.
Now you are saying that increasing the taxes on our kids education savings are not a bad thing to do, just lets me know how you feel about our youth and anyone who gets in your way to save or keep money!

Jill said...

Just another example of how Bush is raping the citizens and for some reason we dont care. Where are our elected officials who vote for this crap. They certainly dont represent me! I feel that it is useless to say but the American public had better wake up now before we have nothing left!

iiq374 said...

I wish I could save for my childrens education at 15%!
The left wing Government here means that the best I can do is at 33% - and that would involve a lawyer setting up a trust, otherwise it would be taxed at 39%.

Both "Liberal" and "Conservative" governments are as likely as each other to give you problems on this issue. Your best bet is to find a Libertarian approach - but even that wouldn't be a guarantee...

LETS TALK said...

Jill, Democrats are held down by the majority, but most folks don't seem to understand this.
What ever the President wants, we are helpless as long as the House and Senate are controlled by the Republican Party.
I concur with you that yes, the American public had better wake up!

LETS TALK said...

iiq374, I would normally agree with part of what you say, but I've come to realize that we are in the real world and this country is about a federal government made up of Republicans and Democrats.
I would love to see a real 3rd Party, but right now that's not what's at issue.
We have a government right now looking out for big business, oil companies, and the very rich.
iiq174, can't you see that our Congress has not passed a bill that favored the average American, they have favored the rich.
This Administration has put the average American to the side in favor of the well to do.
I'm sorry, but right now our main objective is to get this Party out of the House and Senate and then maybe we could look for an America that has a 3rd or 4th Party system.

iiq374 said...

What I was really trying to point out is that here in New Zealand we have the equivalent of your Democrat party in power at present (although here they are called Labour) - and that they too have done nothing to help the average New Zealander.

In fact they have managed to further entrench any class based systems and made it more difficult to work your way out of a lower "class" / middle "class" situation with marginal taxation now reaching over 80% at many income levels.