The House and Senate last week

agreed on a final bill to ease the tax burden on all Americans. Consisting

of a mix of marginal rate reductions, capital gains and dividend reductions,

and measures to improve capital and create jobs, coupled with direct aid

to states, the measure will help to grow employment, improve consumer

confidence, and stimulate investment.

The bill, a result of a conference

committee between the House and Senate, makes significant strides toward

easing the burden on American taxpayers and encouraging job growth.

Additionally, the bill incorporates

portions of four tax bills drafted by me and submitted on the first legislative

day of the 108th Congress. These measures provide relief from the Alternative

Minimum Tax, reduce the tax on dividends, lower the capital gains tax,

and address the treatment of depreciation for capital investments.

Any reduction in taxes paid

contribute to their communities, to contribute to their churches, who

pay their taxes and play by the rules is a step in the right direction.

The American work force is made up of a wide range of people, from farmers,

small business owners, teachers, fire fighters and police officers, small

engine mechanics, airline pilots, and a whole host of others, who make

up the economy of this nation.

A smaller version of the House-passed

bill, many provisions remained intact with minor alterations to their

expiration. The bill contains an acceleration of marginal rate reductions,

an expansion of the lowest marginal rate to include more lower-income

taxpayers, treatment of dividends as capital gains with a lower 15 percent

rate and a 5 percent rate for low-income tax payers that will decrease

to zero, marriage penalty relief, child credit expansion, and small business

expensing incentives.

The bill also contains provisions

to aid cash-strapped states. H.R. 2 provides $20 billion in much needed

relief to states over the next two years. Of this amount, over the next

two years Georgia will receive almost $222 million in Medicaid dollars

for purposes such as continued access to rural hospitals, and $278 million

in flexible funding that will mean more dollars for first responders,

homeland security, education, and other needs in Georgia.

Although several of the measures

of the House passed bill remain partially intact, the narrow majority

of votes in the Senate doomed the final size of the package to less than

half of what the President requested.

Too few votes in the Senate

led to too small a package. Half the size means half the effectiveness.

Here's a summary of the Jobs

and Growth Tax Relief Reconciliation Act of 2003:

Acceleration of 2001 Bush tax

cuts for individuals.

Child credit. Increases child

credit to $1,000 for 2003, 2004. Families will receive a "child credit"

check this year of up to $400 per child.

10 percent bracket. Accelerates

the expansion of the 10 percent bracket for 2003, 2004.

Marriage penalty relief. Accelerates

the expansion of the 15 percent bracket and the increase in the standard

deduction for married persons filing joint returns for 2003, 2004.

Individual rate cuts. Accelerate

the 2006 individual rate cut schedule to 2003. (Rates reduced from 27

percent to 25 percent; 30 percent to 28 percent; 35 percent to 33 percent

and 38.6 percent to 35 percent.)

Increase individual AMT exemption

amount. Increases the AMT exemption amount by $4,500 for single persons

and $9,000 for joint filers for 2003, 2004.

Business and investment incentives

include:

Bonus depreciation. Increases

bonus depreciation from 30 percent to 50 percent and extends through December

31, 2004.

Small business expensing. For

2003 through 2005, increases the amount that small businesses can expense

(immediately deduct) from $25,000 to $100,000.

Increases definition of small

business from $200,000 of capital purchases to $400,000. Both amounts

are indexed for inflation in 2004 and 2005.

Dividends and capital gains.

Dividend and capital gain tax rate reduction 5/15. For taxpayers in the

lowest two tax brackets, reduces the tax rate on dividends and capital

gains to 5 percent through 2007 and zero percent in 2008. For all other

taxpayers, reduces the tax on dividends and capital gains to 15 percent

through 2008.

Aid to states: $20 billion

of help to states. $10 billion will be delivered to states in 2003, and

an additional $10 billion will be provided in 2004. For Georgia $221.71

million for Medicaid and $278.38 in flexible funding.

Quick facts on the Jobs and

Growth Tax Relief Reconciliation Act of 2003:

In 2003, 91 million taxpayers

will receive, on average, a tax cut of $1,126 under the Jobs and Growth

Act of 2003.

68 million women will see

their taxes decline, on average, by $1,338.

45 million married couples

will receive average tax cuts of $1,786.

34 million families with children

will benefit from an average tax cut of $1,549.

6 million single women with

children will receive an average tax cut of $558.

12 million elderly taxpayers

will receive an average tax cut of $1,401.

23 million small business

owners will receive tax cuts averaging $2,209.

3 million individuals and

families will have their income tax liability completely eliminated by

the Act.

A married couple with one child

and income of $40,000 will see their taxes decline by $732 (from $2,235

to $1,503) in 2003, a decline of 33 percent.

Taxes are reduced for 26 million

taxpayers with income from dividends and capital gains by an average of

$798. Among those with tax cuts will be 7 million elderly taxpayers whose

taxes will decline, on average, by $1,088.

This year, a typical family

with one child will receive a check for $400. A typical family with two

children will receive a check for $800. Eligible taxpayers would receive

an average tax cut of $623 each year as a result of the increase in the

child tax credit.

Workers will not need to take

any action to have their withholding adjusted to reflect the marginal

rate cuts. Their paychecks should reflect the tax relief as soon as employers

and payroll processors implement the new withholding tables.