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US Senate, House Reach Final Deal on Tax Cut
US Senate and House negotiators reached a final agreement on Friday night on a 10-year, 1.35 trillion dollars tax cut package.
Under the deal, a new 10 percent tax bracket is carved out of the bottom income levels of the current 15 percent bracket.
The compromise, a mixture of earlier versions passed separately by the Senate and House, would give individual taxpayers a refund of up to 300 dollars this year and married couples up to 600 dollars.
The top 39.6 percent rate would drop to 35 percent and the most other rates would be cut by 3 percentage points. The rate cuts will be phased in over six years but the first installment will take effect this July 1.
The bill increases the current 500 dollars child tax credit to 600 dollars this year and gradually raises it to 1,000 dollars by 2010 and also calls for repealing estate taxes.
The deal was reached by Senate Finance Committee Chairman Charles Grassley and House Ways and Means Committee Chairman Bill Thomas from the Republican Party and Democratic Senators Max Baucus and John Breaux.
The two chambers began negotiations on the tax cut package after the Senate on Wednesday passed its version of the bill. The House earlier approved its own version of the tax bill that follows the lines of Bush's original 1.6 trillion dollars plan.
"As a result of this landmark tax relief agreement, the American taxpayers will have more money in their pockets to save and invest and the economy will receive a much-needed shot in the arm," US President George W. Bush said in a statement.
"Tax relief is the centerpiece of our American agenda and I look forward to signing it into law," he said.
The House and Senate are expected to act on the measure on Saturday and send the package to Bush for his signature before the Memorial Day, May 28.
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