How Should Congress React to Bush's Tax Proposals?
Samuel C. Thompson, Jr.
Pennsylvania State University, Penn State Law
Tax Notes, Vol. 114, p. 1233, March 26, 2007
UCLA School of Law, Law-Econ Research Paper No. 07-03
In this report, Thompson argues that Congress should reject many of President Bush's February 2007 tax proposals and instead (1) return to the pre-2002 rate structure for high-bracket taxpayers, while making permanent tax relief for low- and middle-income taxpayers, (2) provide permanent relief from the alternative minimum tax for middle-income taxpayers by adding 45 percent and 50 percent brackets for taxpayers with super-high levels of income, (3) tax dividends at ordinary income rates with appropriate relief for low-bracket taxpayers, (4) reinstate the maximum 20 percent rate for capital gains of high-bracket taxpayers, (5) reinstate the estate tax with a $4 million exemption and an increase in the marginal rates for large estates, (5) codify the economic substance doctrine, and (6) adopt a current imputation system of taxation for controlled foreign corporations.
Number of Pages in PDF File: 17
Keywords: President Bush's February 2007 tax proposals, proposed rate structures for taxpayers
JEL Classification: K34
Date posted: April 6, 2007