Wes Hickman/Kevin BishopWASHINGTON -- U.S. Senator Lindsey Graham (R-South Carolina) today voted in support of the third largest tax cut in American history. The vote in the Senate was 51-50 with Vice President Dick Cheney casting the deciding vote. The House of Representatives passed the package last night and President Bush will sign the bill into law. Graham noted the legislation contained: Aid to State Governments: Facing a severe budget crunch, state government will benefit from the $20 billion in aid to the states. Over the next eighteen months, South Carolina will receive $136.4 million in direct aid to be spent at the state’s discretion and $129.1 million for the states Medicaid program. (Source: Senate Finance Committee calculations) Tax Relief: All taxpayers will receive relief from lower tax rates across the board. Parents will also benefit from the $400 rebate checks to be mailed out in the coming weeks as the child tax credit is raised from $600 to $1,000. Capital gains tax rates and taxation of dividends are also reduced to help spur economic growth. Married couples will also benefit from elimination of the marriage penalty.
Graham made the following statement after passage of the legislation: “The tax cut is the third largest in American history and it’s at a time when we need more money in the economy. It accomplishes three major goals: helps the states, helps all Americans who pay taxes, and spurs the economy forward. “We’re going to provide South Carolina with approximately $265.6 million over the next eighteen months to help alleviate the budget shortfall. This will have a big impact on the Medicaid program in the short term. However, long-term we still need to address fundamental reform of the Medicaid system. Governor Sanford and the leaders of the state legislature realize Medicaid is a ticking time-bomb and reform is absolutely necessary. “On the tax cut side, families with a child under 18 years old will receive $400 per-child rebates in the coming weeks. We lower all income tax rates across-the-board. Taxpayers will see an increase in their paychecks this summer as employers adjust the withholding rates. We also eliminate the marriage penalty, the quirk in the tax code that causes some married couples to pay more than singles. “The investment climate has improved dramatically with today’s passage of the Bush tax cut. The capital gains tax rate goes down and taxation of dividends is cut in half. The value of the tax cut package is currently $350 billion but over time it will grow and could eventually total about $800 billion. Needless to say, I’m very pleased.”
How May South Carolinians Benefit from Tax Relief: (Based on 2002 Tax Returns)
- At least 862,000 taxpayers will benefit from the lower 10 percent tax bracket.
- At least 271,000 taxpayers will benefit from a reduction in the top tax rates.
- At least 445,000 taxpayers will benefit from elimination of the marriage penalty.
- At least 373,000 taxpayers will benefit from the $1,000 per child tax credit.
- At least 301,000 taxpayers will benefit from reduced taxes on capital gains and dividends.