George W. Bush — the son of former president George H. W. Bush — took office in 2001 and immediately went to work trying to pull us from an economic recession.
e and Congress pushed through the Economic Growth and Tax Relief Reconciliation Act of 2001 that reduced taxes across the board, increased child tax credits, expanded the earned income tax credit and more. In 2003, the law was refreshed, further reducing tax rates.
These tax cuts rolled into the Obama administration, and by 2012, tax rates started from 10 percent on the first $8,700 of income and rose to 15 percent from $8,7001 to $35,350. The rates then rose to 25 percent at $35,351, 28 percent at $71,351, 33 percent at $108,726, and 35 percent from $194,176 and higher.
Barack Obama and Congress made many of the Bush-era tax cuts permanent with the American Taxpayer Relief Act of 2012.
This new law retained all six of the Bush-era income tax rates, but the income brackets shifted upward. At the lowest end, the 10 percent tax rate income cap jumped $225 to $8,925. At the highest end, the 33 percent income tax rate income cap jumped $5,000 to $199,175. The only hard changes were a $225,000 cap on the 35 percent tax bracket and a new 39.6 percent tax bracket for those who earned more than $225,000.