US House and Senate negotiators have sanctioned a 10-year, $1.35 trillion tax cut package that would give individuals a $300 rebate this year and married couples $600.
"We will be able to provide this year more than $30 billion to American taxpayers to use as they see fit, rather than the government," said House Ways and Means Committee Chairman Mr Bill Thomas.
The compromise reached yesterday is a blend of President George W Bush's tax proposals and earlier versions passed separately by the House and Senate.
It carves out a new 10 per cent bottom tax rate for the first $6,000 of an individual's income and $12,000 for a married couple.
Most other rates would be cut by 3 per cent points. The top 39.6 per cent rate would drop to 35 per cent. The rate cuts will be phased in over six years but the first installment will take effect on July 1st.
In addition to the income tax cuts, the bill will provide relief from the marriage penalty paid by millions of two-income couples by widening the 15 per cent bracket so that more of their earnings are taxed at a lower rate. It would also increase the standard deduction for married couples so it equals twice that of singles.
AP