Mutual fund industry analysts are optimistic about the impact the tax cut proposed by President-elect George W. Bush will have on the industry. The proposal would streamline the current five-rate tax structure to a four-rate structure. Under the current structure, the lowest rate is 15 percent and the highest is 39.6 percent. Under the proposal, the lowest rate would drop to 10 percent and the highest to 33 percent. This would provide approximately $460 billion of tax relief over five years, according to President-elect Bush's website, "A Tax Cut with a Purpose."
The plan will also reduce the so-called "marriage penalty" by allowing two-earner families to deduct up to an additional $3,000, and eliminate the so-called "death tax."