Opposition Democrats have attacked the cuts as disproportionately benefiting the wealthy. They were watered down slightly by Congress but the BBC Washington correspondent says there is no denying the scale of President Bush's political victory.
Today is a great day for America.
He said such broad tax relief had only happened twice since World War II - President Kennedy's tax cuts in the 1960s and Ronald Reagan's in the 1980s. Democrats did not share his glee. This is a classic case of opportunity lost. House and Senate negotiators finally thrashed out a compromise the weekend before last, and the bill was passed in both houses. Correspondents say the scale of the tax cuts was politically unthinkable six months ago, as was the speed with which they were pushed through.