As a result of the 2001 tax cuts enacted by a bipartisan Congress and signed by President George W. Bush, the share of taxes paid by the top 10% increased to 72.8% in 2005 from 67.8% in 2001, according to the latest data from the Congressional Budget Office (CBO).
Contrary to the myth that Mr. Bush cut taxes only for the wealthy, the 2001 tax cut reduced taxes for every income-tax payer in the country. He reduced the bottom tax rate to 10% from 15% and increased the refundable child tax credit to $1,000 from $500 per child, both cuts that President Barack Obama says we should keep. In so doing, millions of lower income taxpayers were removed from the tax rolls, shifting the remaining burden to those at the top, even after their taxes were cut.
According to the CBO, those who made less than $44,300 in 2001 -- 60% of the country -- paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden. Their share shrank even when taking into account the payroll tax. In 2001, the bottom 60% paid 16.3% of all taxes; by 2005 their share was down to 14.3%. All the while, this large group of voters made 25.8% of the nation's income.
When you make almost 26% of the income and you pay only 0.6% of the income tax, that's a good deal, courtesy of those who do pay income taxes. For the bottom 40%, the redistribution deal is even better. In 2001, these 43 million Americans, who earn less than $30,500, made 13.5% of the nation's income but paid no income tax. Instead, they received checks from their taxpaying neighbors worth $16.3 billion. By 2005, those checks totaled $33.3 billion.
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8 years ago
Mr. Fleischer fails to mention that the marginal income tax rate for those in the highest-earning bracket fell from 39.6% to 35% due to Bush's tax cuts. (http://www.taxfoundation.org/publications/printer/151.html) That those in the lowest bracket paid 5% less, as Mr. Fleischer reminds us, is hardly reassuring when we consider that these are the same people who benefit most greatly from social programs funded by the income taxes of the extremely wealthy, whose taxes fell precipitously and by almost the same deficit. (It's the lowest tax rate for the wealthy in decades.)
ReplyDeleteAlso, I have to take issue with Mr. Fleischer's using shares of total tax receipts, as many could be easily misled by these figures. He cites that the share of taxes paid by the top 10% went from 67.8% in 2001 to 72.8% in 2005. Since their tax rates were lowered during the same term, this figure is due in no part to Bush's taxes policy, but to the unprecedented rise in personal income by those same top 10%. (www.census.gov)
It's the same story. The rich are got richer and the poor got poorer. Mr. Fleischer's deceptive use of statistics just puts the icing on the cake.