Benefits in Senate Tax-Cut Bill Have Varying Life Spans --- Some Provisions Look Bigger or Smaller, Depending on When They Take Effect
WASHINGTON -- Many of the eye-catching benefits for the middle class in the Senate tax-cut bill will phase out after a few years, while breaks for the rich tend to arrive late -- and stay.</br></br>The bill has been criticized as a legislative hall of mirrors, with benefits that often look bigger, or smaller, than they really are depending on when they take effect and for how long.</br></br>The basic reason for this: The Senate has been trying to cram most of the benefits of Mr. Bush's $1.6 trillion 10-year plan -- along with additional provisions aimed at pleasing middle-class voters -- into a much smaller, $1.35 trillion package. In order to do that, Senators had to push some benefits out to year 11, while starting others quickly, then stopping them after a couple of years.</br></br>Even some of the bill's most basic breaks arrive slowly. For example, income-tax rate relief begins immediately, but takes full effect only in 2007; estate-tax repeal, tax relief for married couples and the doubling of the child credit all become fully effective in 2011. A new $500 credit for student-loan interest takes effect in 2009. But a new deduction for college tuition abruptly ends after 2005.</br></br>"Ridiculous," said Clint Stretch, director of tax policy for Deloitte & Touche in Washington, referring to all the phase-ins and phase-outs. "The bottom line is they're stretching to do as much as they can."