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From the National Review Online:
...newly released IRS data refute the charge that the Bush tax cuts favored “the rich” and instead show that all income groups benefited from the reforms.
...New IRS data for the 2002 tax year … provide a window into the effects of the initial Bush tax cuts on taxpayers, broken down by income. The results clearly show the across-the-board nature of the tax reductions and refute claims that the changes benefited higher-income taxpayers to the detriment of lower-income households.
...the average rate of taxation for those earning under $75,000 dropped by 2.1 percentage points between 2000 and 2002, while the rate for those earning $75,000 or more declined by only 1.6 percentage points.
... [For households making $200,000 or more, the] average rate of taxation was practically unchanged at 30 percent in 2002 compared with 29.9 percent in 2000.
The first round of Bush tax cuts thus was unquestionably equitable. ...it still managed to spread the benefits of lower tax rates to all income groups in roughly equal measure.
The talking point of the Left that Bush’s tax cuts favored the rich appears to have been incorrect. There were no tax cuts on those earning over $200,000 a year. They paid an average of 29.9% in 2000, and in 2002, after the GWB tax cuts, they paid an average of 30%.
For those earning more than $75,000 a year—they got a tax cut, but it was a lower one than the tax cut for those earning less than $75,000. Those earning less than $75,000 got an average break of 2.1 percentage points, while those earning more got an average break of only 1.6 percentage points.
Update: 1-12-05. Welcome, Carnival of the Vanities readers! This site is proud to have this article included in the latest Carnival of the Vanities, hosted this week by MultipleMentality.
#1
#2Hi Jeremy. Thanks for the comment. Yes, the Left says that Bush's tax cuts favored the rich. But, as this article shows, that is not correct.
I'm not aware of anyone saying that Clinton had tax cuts that favored the rich. Did Clinton cut taxes?
#3I see what you're saying. Thanks! The line has been fixed.
The Clinton-era capital-gains relief, more correctly the Gingrich tax cut, was widely condemned as a tax cut for the rich. It enabled me to move from working poor but house-rich to solidly middle class.
#5That's great to hear, Triticale. Have you blogged about it yet on your site? If so, please post a link here so we can read more about it.
I haven't written an essay yet, just posted mentions here and about. Very simply, we bought a cheap home out in front of the yuppies, and when we sold it nineteen years later and moved someplace cheaper we were able to keep the difference because of the tax relief. We went from having the worst house on the block to having the nicest, and from living month to month to having money in the bank. The technical term for this process is "The American Dream".
#7Cool. Please let me know if you post about this.
#8Hello,
My name is Ray, today is maybe the second time I've visited, and, right up front, let me tell you, I'm generally a Leftie. But I try to be reasonable and open to considering other's ideas.
I'm happy to know that the Tax Cuts were so evenly effective. It seems to me, however, never to see statistics regarding those who's income falls well below $75,000, and even if their contribution to overall governmental tax receipts may be relatively small, any tax changes have a significant impact on them personally.
There is a point regarding the timing of tax cuts (and any other economic stimulae) vis-a-vis the seemingly unmanageable "business cycles" which underly our economy. There is an apparent coinsidence of tax cuts and the upward trend of the business cycle at the time of the "Reagan Tax Cuts", and perhaps with the more recent "Bush Tax cuts".
Their may also a coinsiedense where Clinton's economcs rode not only the dot.com boom, but was assisted by the underlying business cycle.
Whatever the facts regarding one admonistration's policies versus another, there is no question that the cycles are real, and that their effects on the then current administration will be significant but often unrecognized.
I invite you to read a brief paper entitled "Does Cutting Tax Rates Increase Economic Growth?", written by Richard Kogan of the Center on Budget and Policy Priorities. (Yes, I know it's a bunch of lefties, but so what, we can learn from each other.) This paper was written in 1996, so may be difficulto find. If that's the case, and if you are interested, I'll scan it and send it to you.
Thanks for the opportunity to invite your consideration.
Ray Grant
Two minutes with google and I found the article Ray recommended here.
Did you mean to say that the left has been saying that Clinton's tax cuts favored the rich? That's what the left says about Bush's tax cuts.