Bush Tax Cuts


DEFINITION of 'Bush Tax Cuts'

A series of temporary income tax relief measures enacted by President George W. Bush in 2001 and 2003. The tax cuts lowered federal income tax rates for everyone, decreased the marriage penalty, lowered capital gains taxes, lowered the tax rate on dividend income, increased the child tax credit from $500 to $1,000 per child, eliminated the phaseout on personal exemptions for higher-income taxpayers and eliminated the phaseout on itemized deductions and eliminated the estate tax.


Because the tax cuts were in place for so many years, they began to feel permanent rather than temporary, and taxpayers and politicians raised a major outcry as their expiration date approached. Those who wanted to let the tax cuts expire as scheduled argued that the government needed the extra tax revenue in the face of massive its budget deficits. Those who wanted to extend the tax cuts or make them permanent argued that because taxes reduce economic growth and stifle entrepreneurship and incentives to work, effectively increasing taxes during a recession was a bad idea.

  1. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Withholding Tax

    1. Income tax withheld from employees' wages and paid directly ...
  4. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  5. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
  6. Progressive Tax

    A tax that takes a larger percentage from the income of high-income ...
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    Estate planning fees may be tax deductible, but only if certain conditions have been met. Internal Revenue Service (IRS) ... Read Full Answer >>
  2. Do tax brackets include Social Security?

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  3. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
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