Bush Tax Cuts

The phrase Bush tax cuts refers to changes to the United States tax code passed originally during the presidency of George W. Bush and extended during the presidency of Barack Obama, through:

• Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
• Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
• Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

While each act has its own legislative history and effect on the tax code, the JGTRRA amplified and accelerated aspects of the EGTRRA. Since 2003, the two acts have often been spoken of together, especially in terms of analyzing their effect on the U.S. economy and population and in discussing their political ramifications. Both laws were passed using controversial Congressional reconciliation procedures.

The Bush tax cuts had sunset provisions that made them expire at the end of 2010, since otherwise they would fall under the Byrd Rule. Whether to renew the lowered rates, and how, became the subject of extended political debate, which was resolved during the presidency of Barack Obama by a two-year extension that was part of a larger tax and economic package, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

Before the tax cuts, the highest marginal income tax rate was 39.6 percent. After the cuts, the highest rate was 35 percent.