June 3, 2001

Washington, D.C.- President Bush signed into law last week a long-overdue tax cut I have been supporting for years. With unprecedented speed, President Bush pushed through the tax cut plan he had promised, and roughly four months after taking office, real tax relief was on the President's desk and was quickly signed into law. Remember, it was only last year that then-President Clinton vetoed our $700 billion tax relief package. This package will provide $1.35 trillion of taxpayer dollars back into taxpayer pockets. I have supported each of these proposals for tax relief. Here's what that tax cut will mean to you in dollars and cents.

Lower Marginal Tax Rates
The law will create six lower marginal tax rates: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent. And the 10 percent rate will be retroactive to Jan. 1, 2001 on the first $6,000 for singles and $12,000 for couples. Because the rates will be lower for all income levels, this means that every single American who currently pays taxes will get a tax cut. It's that simple.

Lump-sum Refunds
To help give the economy a quick shot in the arm, all taxpaying Americans will also receive a lump-sum refund, in the form of a check from the government, this year. These checks are scheduled to be mailed around the end of this summer. Single taxpayers will receive up to $300. Single parents will receive up to $500. And married taxpayers will receive up to $600. I've been saying that we need to give back some of the hard-earned tax dollars to those who earned it, and it will be a beautiful sight when these checks are dropped in the mail. The sooner we can get this money out of Washington, the less likely it will be spent on useless government projects.

Repeal the Marriage Penalty
Until recently, most married couples didn't realize the government gave them a tax bite just for getting hitched. But that's exactly what was happening for millions of Americans. Because of a quirk in the tax code, people who were married were paying more in taxes than if they had been filing as single taxpayers. But not anymore. The new law eliminates the marriage penalty in the standard deduction for non-itemizers, and it widens the 15 percent bracket to twice that of singles.

Now we can stop penalizing people who get married with a higher tax bill. Last year, more than 300,000 couples in Oklahoma alone paid the marriage penalty tax. The average increase in taxes for married couples was $1,400.

Repeal the Death Tax
Meeting the Grim Reaper is frightening enough. Taxpayers shouldn't have to meet the tax man on the same day. That's why this law will repeal the death tax by 2011. The death tax, or estate tax, is the onerous and unfair tax levied on small businesses and farmers when a loved one dies. It amounts to double taxation - assets are taxed as income when they are earned and then again as an estate when they are passed on to the next generation. Some estates are being taxed at rates of up to an unbelievable 55 percent! Business owners and farmers spend years working to pass on their life's work to their children, not the government. This provision will help ensure that wish is granted.

Double the Child Tax Credit
The law doubles the child tax credit from $500 to $1,000. The credit will be phased in through 2010. It will increase to $600 from 2001 through 2007, $700 in 2008, $800 in 2009, and $1,000 in 2010. This is great news for working families, who can use the extra refunds for school expenses or to help save for college.

Planning for Retirement
Uncle Sam should be helping workers save for retirement, not hampering them. That's why this law increases IRA contributions from $2,000 to $5,000, to help workers sock away more for their senior years. It also increases 401(k) and other tax-deferred contribution limits from $10,500 to $15,000. These rules will help those who aren't saving to do so and those who are to save more.

Education Incentives
The new law will also encourage Americans to save for their education or their children's education. It increases education savings accounts from $500 to $2,000 and expands to K-12 public and private education. It also provides for an above-the-line deduction for higher education expenses. And it allows private institutions to offer pre-paid tuition plans.

This tax plan is a prescription for relief that I, and the rest of America, have been asking for. It restores fairness to the tax code, provides meaningful tax relief, and saves funding for our priorities. It's been a long time coming, but we've finally done it. I'm proud to have taken part in bringing this tax relief to the American people.