Once again, President Bush has pledged to keep taxes low, but it seems he is doing just the opposite. Less than two weeks ago, Bush signed a tax-cut bill that might reduce federal income tax by $69 billion over the 2006-2015 period; however, it contains a provision mandating that teenagers who have income from investments will no longer be taxed at their own, low rate. Teens 14-17 will instead pay investment income tax rates that mirror those their parents pay.
Previously, parents invested funds in their children’s names to ease the process of saving money for college and graduate school. Thanks to Bush’s new tax hike for teens, it will be that much less financially feasible for families to comfortably save money for education. If a teenager has been taxed at a rate of 10 percent, and her parents are taxed at a rate of 35 percent, she may instantly lose hundreds of dollars per year because of a more than doubled taxation.
As students, we are more than fed up with getting the short end of the federal budget stick. Bush received kudos for cutting taxes by $69 billion while teenagers struggling for the opportunity to attend college received one more roadblock to an education. Bush should offer teens a logical explanation about why future college students deserve increased taxation.