Pres. Bush's State of The Union Address Advocates Making Tax Cuts Permanent
President Bush state that tax cuts had invigorated the economy, and he wants Congress to make permanent the temporary tax reductions passed in 2001 and 2003.
Those tax cuts include an expansion of the bottom, 10 percent tax bracket that lowered taxes for virtually every wage earner. It includes changes that eliminated some of the so-called marriage penalty, which causes some couples to pay more than they would as two single individuals. It also includes the child tax credit, just increased to $1,000 per child, which would drop back to $700 at the end of the year.
Renewal of the No Child Left Behind education law might also offer an opportunity to make some education and retirement saving incentives permanent.
A bigger question surrounds a law, designed as an economic stimulus, that allows businesses to immediately write off half of their investments this year. Left unchanged, the law will evaporate at the end of the year. This could hinder business expenditures and hamper economic growth.