Report: 1/3 of tax cuts benefit top 1% of Americans...

Good post. Well, rather than face every conceivable facet of this issue tonight, let me just say that based on what I have read, Bush's tax cut is slightly less favorable to the rich than a simple across the board percentage would be, and I don't think that it's fair to him to portray this as a massive conspiracy to help the rich based on a simple comparison of dollar amounts. Also, I would like to point out that an across the board percentage applied to all tax brackets, would still leave them graduated in the same proportion as before.

I feel a need to keep you honest here. Let us just look at the tax brackets before and after the Bush tax cuts and see what happened to them.

Before................After.........Delta
15........................10.............-5% First 25% of this bracket went to 10%
15........................15..............0% not much here
28........................25.............-3%
31%.....................28%..........-3%
36%.....................33%..........-3%
39.6%..................35%..........-4.6 Largest percent cut here

As is clearly shown the top earners got not only the largest dollar amount, but also the largest percentage change. Since the tax package also had changes in credits for children it was possible to show individual circumstances that made the picture look different as in the example you provided.

Let us also not forget that any income in the top brackets has already passed the limit for social security payroll deductions.

When discussing progressive tax rates and relative fairness, it sometime helps to look at history and see where we have been. A chart showing the Maximum marginal tax rate from 1916 to present can be found here. Note that during times that this country has been involved in expensive wars, the max rate has been much higher than now. It reached a peak of 94% in 1944/1945.

First of all, you don't need to keep me honest because I am honest. I may make an error from time to time, but that has nothing to do with honesty. I have had a very hard time getting comprehensible data on this tax cut, but I have seen responsible sites with statements to the effect that the highest bracket will have its burden increase slightly.

Now, as to your figures, this isn't my area of expertise, but even by your own accounting, which I have no easy way to check, the largest percentage reduction is in the lowest portion of the lowest income bracket: 5%. Furthermore, I just found this:

"The richest Americans -- that's both singles and married couples whose AGI tops $311,950 -- now pay tax rates up to 38.6 percent. That rate would be cut to 35 percent."

at http://money.cnn.com/2003/05/22/pf/taxes/q_taxbill/

There seems to be a discrepancy between their figure of 38.6% and yours of 39.6%.

Would you please give me a reference for your figures?

Re: keep you honest...Sorry, poor choice of words on my part. As to the highest bracket having it's burden increased slightly, that may be. The report at the beginning of this thread was addressing the top 1% which is a subset of the top bracket. It said that the top 1% would have their share of the burden reduced by 2%

At first look it may appear that way, but the 10% bracket was a new bracket that replaced only the the first 1/4 of the old 15% bracket . It covers only a small amount of income 0-$7000 (for single). In any event, that reduction is also realized by those in higher brackets. Each bracket only applies to taxable income that is above a threshold.

Their figure is only comparing the last tax cut. The 2001 cut took it from 39.6 to 38.6.

Sure, direct from the no spin zone. I looked at my 2000 and 2003 1040 instructions for the tax rate schedules. They can be found online here. The rate schedules are on the last page (13)
IRS 2000 Tax rate tables and schedule.

IRS 2003 Tax rate tables and schedule

When you look at the rate schedules, note that the taxable income group which got NO reduction in the marginal tax rates was
$7,000 to $28,400 (single)
$14,000 to $56,800 (Married filing jointly)
Keep in mind that those figures are for taxable income, not gross income, so you can see that is a rather large range of income that got nearly squat if no child tax credit was available. I rather think that many people in that income range consider themselves middle class.

I am one of the dident get squat bunch in the middle class range with no kids and your right. For practacly the same income I dident get any tax cuts.

When you look at what is paid has any one's tax's gone up? Did people actually get their tax's raised in any amount? Just because one group gets a tax cut doesn't mean another group gets their tax's raised. The people who didn't get a tax cut don't pay anymore in tax's did they?

Baldimo


Play that again Sam. It comes over like a line from an Abbot and Costello movie. Who is on first?

Are you going to answer the quesstion or are you going to dodge?

Does a 20% increase in property taxes rate as a tax increase or do you only count federal income taxes. Also my auto tags went up about 15%. I could keep on going because the state I live in raised all taxes except state income taxes. So the 600 dollar tax decrease dident even pay for the increase in my hospital insurance. Great tax break for the middle class.

It sounds like you have an issue with your state tax's not your federal taxs. What state do you live in? I know my property tax goes up all the time, which you shouldn't complain about. Most propety tax's do to pay for your local school system. Don't you wnat the local children to have the best school education you can afford?

USA > Economy
from the May 28, 2003 edition

As US cuts taxes, states hike them

New York's $2 billion-plus tax hike is just the latest of several overhauls that could recast the social safety net.

By Abraham McLaughlin | Staff writer of The Christian Science Monitor

In Washington, this may be the era of tax cuts and more tax cuts. But in statehouses around the nation, it's increasingly a time of big tax increases. Faced with budget shortfalls and mounting pressure to avoid cutting social services during economic doldrums, more state lawmakers are abandoning their usual reluctance and raising taxes, some boldly enough to risk their political futures in the process. Alabama, New York, California, and Nevada are moving to raise taxes by record amounts.







The growing gap between Washington and states on taxes stems partly from the requirement most states face to balance their budgets - a mandate Washington doesn't have. But it also highlights an increasing division - including within the Republican Party - over the role of government in a weak job climate. In fact, the trend may herald the rising role of states as key providers of America's social safety net.

In most states "we're going to see big tax increases this year. It almost seems inevitable," says Nicholas Jenny, a tax analyst at The Rockefeller Institute of Government in Albany, N.Y.

This doesn't mean states are boosting income taxes across the board. They're targeting higher-wage earners instead. But the magnitude of the increases in some states is stunning. In many cases, sales taxes are going up, affecting whole state popluations.

Consider what happened in Mr. Jenny's home state of New York this month: The Republican-controlled Senate overrode Gov. George Pataki's veto of a tax increase of more than $2 billion. By one measure, it's the largest hike in state history.

How is it that a Republican-led senate championed a giant tax increase? First of all, at the state level, "Ideology matters less than you would think," says Mr. Jenny. New York faced an $11.5 billion budget gap. Something had to be done.

But in passing the hike, the legislature also undid roughly $1.3 billion in cuts to education and healthcare that Governor Pataki had planned. Raising the sales tax and income taxes for those making more than $100,000 clearly aims to ensure the state provides for its citizens during tough economic times. "New Yorkers expect government to serve them," says John Zogby, an independent pollster in Utica. "We're the original welfare state."

That's far less true in Alabama, a famously tax-averse place. But even there, a conservative Republican rookie, Gov. Bob Riley, recently shocked many by proposing a $1.2 billion increase in sales, income, and other taxes - mostly aimed at boosting education.

Observers say the plan has decent public support. Following roughly two years of official kvetching about state budget woes - in Alabama and across the nation - the public knows there's a problem.

"People are saying, 'If this [tax money] goes to education, then it may be OK,'" says David Lanoue, a political scientist at the University of Alabama at Tuscaloosa. There's also an echo of Nixon going to China in Governor Riley's proposal. Before winning the governorship, he was a conservative member of Congress who never voted for a tax increase, says Dr. Lanoue. "So there's a sense that if someone as conservative as Bob Riley is saying taxes need to be raised, then it's really needed."

Riley's plan would significantly boost the state's commitment to education. And it would require far fewer of the state's poor residents to pay taxes.

Other governors are aiming for fundamental changes, too. Nevada's Republican Gov. Kenny Guinn is the primary cheerleader for the state's biggest-ever tax increase - a $1 billion package aimed at noncasino businesses. "With this package, we're ending the era in which the hotel casinos and the tourists pay all the taxes," says Richard Siegel, a political scientist at the University of Nevada, Reno.

So far, these tax-raisers don't appear to be paying political consequences. In fact, the timing of these hikes works well for many state executives. "Many governors are in the first year of their term, which gives them three years to recover," says Lanoue. "And three years is a lifetime in politics."

Then there are "lame duck" governors who have little to lose from backing tax hikes. California Gov. Gray Davis (D), a second-termer who can't run again, proposed an $8.3 billion tax increase, including hikes in sales, automobile, and (higher-end) income taxes.

For state office-holders who see taxes as too risky, another option is to pass along budget woes to towns. But that often forces property taxes up. "There are school districts in upstate New York voting on 47-percent property-tax hikes," says Zogby. In fact, passing the buck to states may be the effect of Washington's tax cuts, he says. President Bush and others see tax cuts - and smaller government - as key to jumpstarting the economy. But as Washington slashes taxes and focuses spending on the military, states are left to shoulder a larger share of the social-service load.

You mean to tell me you are going to pass on an old article as current? THis was sritten over a year ago, did those things actually happen? Are you trying to pull the wool over people's eyes here? Got anything current?

Plus you can't conpare state tax's and fed tax's because they are different tax's.

Re: Report: 1/3 of tax cuts benefit top 1% of Americans...


This sounds very familiar to my Oz ears.
Hey, George stole our tax policies! :wink:

Baldimo

Did it happen. Of course the burden has been passed to the states. it is called unfunded or underfunded mandates. Bush cut back in all areas of funding and the states were left to pick up the slack. The state governors complaints fell on deaf ears.