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Extension of tax cuts considered

WASHINGTON (AP) — Congress may extend some tax cuts that are due to diminish at year’s end, including new child tax credits and a bracket expansion that lowered taxes for wage earners. But lawmakers have concluded that making all of President Bush’s tax cuts permanent will have to wait until after the fall election.

The reductions passed in 2001 and 2003 are to go away entirely in 2011. Some will shrink on Jan. 1, 2005. President Bush renewed calls in his State of the Union address to make all of the cuts permanent this year.

The most urgently pressing changes will come next Jan. 1, when some of the most politically popular tax cuts recede.

Those tax cuts include an expansion of the bottom 10 percent tax bracket that lowered taxes for virtually every worker. Also expiring then are some changes lessening the marriage penalty, which causes some couples to pay more than they would as two single individuals. The child tax credit that was raised from $600 to $1,000 per child last year is due to drop back to $700.

“I think that those are very popular items in the tax code,” said Paul Weinstein, a senior fellow at the liberal Progressive Policy Institute. He said it was interesting that the authors of the legislation picked an election year for the measures to expire or diminish. “I think some thought was given to that,” Weinstein said.

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