Debunking the "Taxcuts for the Rich" Myth

From the DNC NY Times

Report Finds Tax Cuts Heavily Favor the Wealthy

WASHINGTON, Aug. 12 – Fully one-third [see note 1 below -ed] of President Bush’s tax cuts in the last three years have gone to people with the top 1 percent of income, who have earned an average of $1.2 million annually, according to a report by the nonpartisan Congressional Budget Office to be published Friday.

The report calculated that households with incomes in that top 1 percent were receiving an average tax cut of $78,460 this year, while households in the middle 20 percent of earnings – averaging about $57,000 a year – were getting an average cut of only $1,090.

How on earth can someone making $57,000 a year expect a $78,460 tax cut?

According to the new report from the Congressional Budget Office, about two-thirds [see note 2 below -ed] of the benefits from the tax cuts, enacted in 2001 and 2003, went to households in the top fifth of earnings, with an average income of $203,740.

Here’s another Newsflash NYT- The people who pay more taxes benefit more when taxes are cut.

REALITY CHECK
Tax Burden Distribution
The top 1% pays 33.89% of all income taxes
The top 5% pays 53.25%
The top 10% pays 64.89%
The top 25% pays 82.9%
The top 50% pays 96.03%
The bottom 50% pays a mere 3.97% of income taxes.

Note 1: Why did one third of the tax break go to the wealthiest 1%? DUH! They pay one third the taxes- How hard is it?!?

Note 2: Why did two thirds of the tax break go to that top 20%? Could it be that they pay two thirds of all taxes? Astonishing, I know.

Income Distribution
The top 1% earns 17.53 of all income.
The top 5% earns 31.99.
The top 10% earns 43.11%
The top 25% earns 65.23%,
Top 50% earns 86.19% of all income.

Source: IRS

UPDATE Below the fold

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Apparently my dry wit was lost on some of my commentors when I said: “How on earth can someone making $57,000 a year expect a $78,460 tax cut?”

Go back and look at the story. It is classic class warfare. They say:

“Big fat cat gets XXXXX dollars back while little Joe six-pack ONLY got back XX dollars. COMPLETELY IGNORING the fact that fat cat’s tax break is actually greater than the whole of little guy’s income. How on earth could their tax cuts look the same? Clearly fat cat pays more in taxes than little guy makes!

Of course the guy making 1.2 million a year gets a bigger break than a guy making 52,000, that is obvious. The Times pretends this is some great economic injustice when it is simple math.

Ray got my point. Sorry, if I lost some of you.

In Excess
A few of you owe Kevin Apologies

37 Comments

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