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Fact Sheet on Congressional Tax Proposals in the 108th Congress, Date: February 28, 2003 1 (February 28, 2003)

handle is hein.tera/crstax0458 and id is 1 raw text is: Order Code RS21386 Updated February 28, 2003 CRS Report for Congress Received through the CRS Web Fact Sheet on Congressional Tax Proposals in the 108th Congress Don C. Richards Analyst in Public Finance Government and Finance Division Summary The President has proposed a tax cut that would cost an estimated $695 billion for FY2003-FY2013, with $388 billion of the total resulting from a dividend relief proposal and the remainder primarily due to acceleration of future tax cuts enacted in 2001. House Democrats have proposed a smaller plan that is limited to temporary provisions costing an estimated $100 billion over 10 years. Senate Minority Leader Tom Daschle has proposed a third comprehensive alternative offering several components similar to the House Democratic plan. Congress may also reconsider legislation not completed in the 107th Congress, including energy tax subsidies, tax incentives for charitable giving deductions, pension diversification as an outgrowth of concerns relating to the failure of Enron, and tax shelters. This report will be updated to reflect legislative developments. Major Comprehensive Tax Proposals The President has proposed a tax cut with an estimated revenue effect of $30 billion in FY2003 and $695 billion over FY2003-FY2013.1 The largest component is a dividend exclusion proposal that accounts for $2.6 billion in FY2003 and $388 billion, or 56%, of the FY2003-FY2013 cost. This proposal would also eliminate individual taxes on retained earnings by increasing the basis of stocks, and classify income to ensure the benefit is confined to income subject to current corporate income tax. The provisions of The components and estimates cited for the President's proposal, prepared by the Administration, are reported on the Treasury Department's Web site, available at [http://www.ustreas.gov/press/releases/reports/bluebook2OO3.pdfl. Notably, the estimates throughout this report are preliminary and are not prepared by the staff of the Joint Committee on Taxation (JCT) who, as the revenue estimators for Congress, determine the official revenue estimate of any tax change. Congressional Research Service * The Library of Congress

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