Number: RS21863
Title: Recent House Legislation Extending Selected Provisions of the 2001 and 2003 Tax Cuts
Authors: Gregg Esenwein, Government and Finance Division 
Abstract: The Economic Growth and Tax Relief Reconciliation Act of 2001 reduced marginal income tax rates, created a new 10% income tax bracket, provided marriage tax penalty relief, and increased the child tax credit. All of the acts provisions, however, are scheduled to sunset (revert to prior law levels) at the end of 2010. The Jobs and Growth Tax Relief Reconciliation Act of 2003 accelerated the implementation of certain tax reductions that were originally enacted in the 2001 Act. Several of these provisions will expire at the end of 2004, including the expansion of the 10% tax bracket, marriage tax penalty relief, the increase in the child tax credit, and the increase in the alternative minimum tax (AMT) exemption. During this session, Congress faces the issue of whether to extend and/or make permanent these expiring tax provisions. To date, the House has passed four major tax bills; H.R. 4181 would extend and make permanent marriage tax penalty relief, H.R. 4275 would extend and make permanent the 10% tax bracket, H.R. 4359 would extend and make permanent the increase in the child tax credit, and H.R. 4227 would extend the increase in the AMT exemption through 2005. These changes would reduce revenue by $568 billion over the FY2005 to FY2014 period. If the increase in the AMT exemption were made permanent, then the total cost over the period could exceed $1 trillion. Congress is currently considering going to conference on a child tax credit refundability bill (H.R. 1308) that was passed last year, and using the conference agreement as a vehicle for extending these four JGTRRA tax provisions.
Pages: 6
Date: September 17, 2004