May 22, 2006

President Bush Signs Tax Cut Reconciliation Bill

The President has signed into law a $70 billion tax cut bill. The bill—the “Tax Increase Prevention and Reconciliation Act of 2005″—extends the reduced 15 percent tax rates on dividends and capital gains through 2010, and provides alternative minimum tax relief.

“This bill provides much-needed tax relief, sparing millions of Americans from the growing reach of the alternative minimum tax,” said Scott A. Hodge, president of the Tax Foundation. “And by preserving the tax cuts on capital gains and dividends, it moves the U.S. toward a simpler, more pro-growth tax system that lightens the tax burden on capital investments.”

For related research on the bill’s provisions, please see the following:

Fiscal Fact No. 26: Backgrounder on the Individual Alternative Minimum Tax

Fiscal Fact No. 42: Majority of Seniors Benefit from Reduced Capital Gains and Dividend Tax Rates

Fiscal Fact No. 44: Reliance on Capital Gains and Dividend Income Tends to Rise with Age

Fiscal Fact No. 50: The Importance of Dividend Income for Low-Income Seniors

Fiscal Fact No. 51: Majority of Taxpayers Affected by AMT Also Claim Capital Gains or Dividend Income