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Summary

What's in the 2001 tax cut.

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The 2001 Tax Cut

At last we have the final version of the tax cut, containing elements of both the House and Senate versions of the bill. In a rare weekend session on May 26, both houses of Congress voted for the compromise created in the Conference Committee before leaving town for the Memorial Day recess.

Biggest Surprise
The biggest surprise in the final version is that the tax act contains a provision repealing itself as of the end of 2010. Unless Congress takes further action, all the tax cuts go away and the estate tax leaps back into existence on January 1, 2011. Of course, no one expects Congress to sit by and watch a huge tax increase take effect 10 years from now. Yet this tax increase is now built into our national budgetary assumptions. In the bizarre world of budgetary politics, Congress will have to enact a massive tax cut to prevent this huge tax increase from occurring.

What's in the New Tax Law
Learn about what's in the new tax law on the following pages:

Overview. This is where we look at the refund checks we'll be seeing soon, the changes in tax rates and tax benefits for children.

Estate tax. Is it repealed? Well, sort of.

AMT relief. A tiny smidgeon of temporary relief..

Education. The new tax law includes stunning new benefits for education that haven't received much publicity.

Retirement savings. Nearly half of the new law has to do with IRAs and other retirement savings provisions. The most important provisions increase the amount you can contribute to an IRA or 401k plan.

Links
If you need access to the law itself, these use these links for files in PDF format.

Brief Summary from the Joint Committee on Taxation

Conference Report explanation

Legislative language

by Kaye Thomas    
May 27, 2001    

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