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The Bush Administration's Tax cut plan is a hot debated issue in today's America. In my essay, I will first briefly list the content of this plan and then I will discuss its positive and negetive effects to the both in short-term and long-term economy situation. The Bush Administration's Tax cut plan can be divided mainly in two sections according to its attempeted effects: One is aimed at enhancing the average family or person's earning, thus increasing the consumer demand in the whole economy. The following tax cut proceeds are taken to acheieve this goal: "Replacing the current tax rates of 15, 28, 31, 36, and 39.6 percent with a simplified rate structure of 10, 15, 25, and 33 percent; Doubling the child tax credit to $1,000 per child and applying the credit to the Alternative Minimum Tax (AMT);Reducing the marriage penalty by reinstating the 10 percent deduction for two-earner couples." Another part of the tax cut is aimed at increasing the investment in the recessing economy by following proceeds: "Eliminating the death tax;Expanding the charitable deduction to non-itemizers;and Making the Research and Experimentation (R&D) tax credit permanent." Occording to the Principles of the Macroecomics, a society's standard of living is determined by the the productivity of the labors. Among all the several factors affect the productivity, we can change the amount of capital we have by saving more and investing more.
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