WASHINGTON — President Bush, signing into law Wednesday the third-largest tax cut in the nation's history, said that 136 million taxpayers would receive "substantial" relief in just a matter of weeks.
During a ceremony in the East Room of the White House, he predicted that the $350-billion, 11-year package will "help turn our [economic] recovery into a lasting expansion that reaches every single corner of America."
For The Record
Los Angeles Times Friday May 30, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 43 words Type of Material: Correction
Tax cuts -- A headline in Thursday's Section A on an article about the signing of a $350-billion tax relief bill stated that job creation as a result of the cuts will take time. That view should have been attributed to President Bush.
In a sign that the administration wants to get money into taxpayers' hands quickly, the Internal Revenue Service on Wednesday posted on its Web site a revised withholding schedule, so that employers can recalibrate the lowered taxes workers now owe Uncle Sam.
The IRS said employers "should use these new tables as soon as they can work them into their payroll systems, but not later than July 1."
And the Treasury Department announced that about 25 million families who claimed tax credits for children in 2002 would receive refund checks of as much as $400 per child starting July 25. Under the legislation, the top tax credit -- now $600 for each child -- will be $1,000.
Families with an adjusted gross income between $40,000 and $110,000 are expected to receive the full $400 refund, while families with incomes below $40,000 and between $110,000 and $149,000 should receive lesser amounts because of the peculiarities of the tax laws. Families with incomes of more than $150,000 are not likely to receive a refund.
In his East Room remarks, Bush gave several examples of the tax relief included in the package:
"A family of four with a total income of $75,000 will receive a 19% reduction in federal income taxes, saving $1,122 per year," he said. "A family of four with an income of $40,000 will see their income taxes drop from $1,178 to $45, a 96% tax cut. And under this new law, 3 million individuals and families will have their federal income tax liability completely eliminated.
"Altogether, 34 million families with children, including 6 million single moms, will receive an average tax cut of $1,549 per year."
But in a cautionary note, Bush warned that the tax cut's effects on economic growth -- namely, job creation -- would take longer.
"Increased hiring happens gradually, but we're on the path to greater job creation across this country," he said.
Although the $350-billion package falls far short of Bush's initial goal of a $725-billion tax cut, the president pronounced himself satisfied.
