The Bush Tax Cuts: How did the 2003 tax cuts change the tax code?
The 2003 tax cut legislation, titled the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), reduced taxes on dividends and capital gains and accelerated some provisions passed in earlier tax cuts.
- Tax rates on realized capital gains received by individual shareholders were reduced from 10 percent (for taxpayers in tax brackets where the ordinary income tax rate was 15 percent or below) and 20 percent (for all other brackets) to 5 percent and 15 percent, respectively, through 2007 and to 0 and 15 percent in 2008. Tax rates on dividends received by individual shareholders were reduced from the rates that apply to ordinary income to the new capital gains rates.
- The 2001 tax cut had raised the alternative minimum tax exemption to $49,000 for couples and $35,700 for singles through 2004. The 2003 tax cut raised the exemption further, to $58,000 for couples and $40,250 for singles, but still only through 2004.
- The 2003 tax cut also accelerated and expanded many of the provisions of the 2001 tax act, including the expansion of the child tax credit, the reduction in taxes on married couples, and the lower rates and adjusted brackets on individual income. It also expanded the bonus depreciation provision passed in 2002.