Whose Tax Cut?

 

15 April 2003 Washington, DC-

      While the so-called more reputable press continues to report on the haggling in the US Congress over the size of the new tax cut, TheRealTruth has learned who will really benefit the most from the new tax cuts.

 

     

 

 

CBO 2002 Tax Revenue Estimates

 

       AGI Limits ($)

Returns

Tax Rate

Revenue

Total Taxes

Lower

Upper

(thosands)

Current (%)

Current ($M)

Current (%)

0

10000

25755

-6.7

-8.63

-0.9

10000

20000

23602

-3.0

-10.62

-1.1

20000

30000

18644

3.8

17.71

1.8

30000

40000

13534

7.0

33.16

3.3

40000

50000

10307

9.0

41.74

4.1

50000

75000

17874

10.3

115.06

11.4

75000

100000

10224

12.3

110.04

10.9

100000

200000

9906

16.0

237.74

23.5

200000

500000

2395

23.0

192.80

19.1

500000

1000000

418

27.7

86.84

8.6

1000000

5000000

226

28.8

195.26

19.3

 

Total

132885

 

1011.11

100.0

 

 

      These tables were supplied to TheRealTruth by sources in the Congressional Budget Office (CBO) who need to remain anonymous for obvious reasons.  Among other things they show that those tax payers reporting income over $1 million, who hardly need a tax cut, will see an average change about 100 times the change that middle income taxpayers will see and about 1000 times the change that low income tax payers, who need the tax cut the most, will see.

 

 

 

 

How Bush Plan May Affect Your Taxes

 

       AGI Limits ($)

Tax Rate

Revenue

Total Taxes

Average

Lower

Upper

Proposed (%)

Proposed ($M)

Proposed (%)

Change ($)

0

10000

-6.9

-8.89

-1.0

-10

10000

20000

-3.5

-12.39

-1.4

-75

20000

30000

3.0

13.98

1.5

-200

30000

40000

6.1

28.90

3.2

-315

40000

50000

8.0

37.11

4.1

-450

50000

75000

9.1

101.66

11.2

-750

75000

100000

10.4

93.04

10.3

-1663

100000

200000

14.3

212.48

23.4

-2550

200000

500000

21.6

181.06

20.0

-4900

500000

1000000

25.3

79.32

8.7

-18000

1000000

5000000

26.7

181.03

20.0

-63000

 

Total

 

907.29

100.0

 

 

 

      These tables also show that, contrary to the popular party line, the very rich, those with adjusted gross income (AGI) above $1 million, do not pay the most taxes.  They pay less than 20% of the total taxes, while the middle-middle class, those with AGI between $30 thousand and $100 thousand, pay nearly 30% of the total taxes.  As the CBO tables show, those percentages change less than 1% under the proposed tax plan.

      The group that pays the most taxes is the upper-middle class, those reporting an AGI between $100 and $200 thousand.  They pay 23.5% of the total taxes.  The group that pays the least taxes is the middle-rich, those reporting an AGI between $500 thousand and $1 million. They pay only 8.6% of the total taxes.  As the CBO tables show, those percentages change less than 0.1% under the proposed tax plan.

      Note also that low income tax payers earning less than $20 thousand per year actually pay negative taxes. Because of earned income and child care tax credits, they actually get more in return from the IRS than they paid in.

      The tables given to TheRealTruth reflect only the tax cuts due to a change in the tax bracket rates, including the elimination of the difference between single and married tax rates, often called the marriage penalty tax.  They obviously miss the effect of other tax cuts, such as the increase in individual retirement account (IRA) deduction limits, which have the effect of moving individual tax payers into a lower AGI bracket and will benefit the middle class the most.  In particular, they do not include the other major tax cut, the elimination of taxes on stock dividends, which is expected to double the magnitude of the tax cut for the rich and upper-middle classes.

      This is the Real Truth!