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Jobs and Growth Tax Relief Reconciliation Act: Provisions Expiring in 2004, July 15, 2004 1 (July 15, 2004)

handle is hein.tera/crstax0347 and id is 1 raw text is: Order Code RS21708 Updated July 15, 2004 CRS Report for Congress Received through the CRS Web Jobs and Growth Tax Relief Reconciliation Act: Provisions Expiring in 2004 Gregg Esenwein Specialist in Public Finance Government and Finance Division Summary The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108- 27) accelerated the implementation of certain tax reductions that were originally enacted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16). The 2003 act reduced marginal income tax rates effective through 2010 and reduced taxes on dividend and capital gains income effective through the end of 2008. Several of these provisions will expire at the end of 2004, including the increase in the child tax credit, the expansion of the 10% tax bracket, the expansion of the 15% tax bracket and standard deduction for joint returns, the increase in the alternative minimum tax (AMT) exemption, and the tax incentives for business. 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-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. This report will be updated as legislative action warrants. Child Tax Credit In 2001, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) increased the child tax credit from $500 to $1,000, with the increase phased-in over the 2001 through 2010 time period. In 2001 and 2002, the credit was $600. For 2003 and Congressional Research Service ** The Library of Congress

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