Congressional Budget Office Report:
Bush Tax Cuts Tilted to Rich
Fri Aug 13, 2004 08:30 PM ET
By Vicki Allen
WASHINGTON (Reuters) - One-third of President Bush's tax cuts have gone to the wealthiest 1 percent of Americans, shifting more burden to middle-income taxpayers, congressional analysts said on Friday.
The report by the nonpartisan Congressional Budget Office and calculations by congressional Democrats based on the CBO findings fueled the debate over the cuts between Bush and his Democratic challenger in November, Sen. John Kerry.
Using the CBO's figures, Democrats in Congress said the top 1 percent, with incomes averaging $1.2 million per year, will receive an average tax cut of $78,460 this year, and have seen their share of the total tax burden fall roughly 2 percentage points to 20.1 percent.
In contrast, the report showed that households in the middle 20 percent, with incomes averaging $57,000 per year, will receive an average cut of $1,090 while their share of the tax burden would move to 10.5 percent from 10.4 percent.
The CBO report said about two-thirds of the benefits from the cuts went to households in the top 20 percent, with an average income of $203,740.
People with earnings in the lowest 20 percent, which averaged $16,620, saw their effective tax rate fall to 5.2 percent from 6.7 percent, the CBO said. But Democrats said that meant their average tax cut was only $250.
Democrats said the CBO calculations, which they requested, confirm the view of independent tax analysts that the tax cuts enacted in 2001 and 2003 have heavily favored the wealthiest taxpayers.
"It is bad enough that George Bush has no plan to help middle-class families squeezed by declining wages and skyrocketing costs for healthcare, energy and college tuition," Kerry said in a statement.
"Now we find that he is deliberately stacking the deck against them. This is the straw that will break the back of middle-class families."
But Republicans said the CBO numbers showed Bush has provided tax relief for people of all income levels.
Rep. Bill Thomas of California, chairman of the House of Representatives Ways and Means Committee, said the report showed Bush's tax cuts "have made the tax code more progressive and taxpayers across the income spectrum will be saddled with higher tax burdens if the tax cuts are not made permanent."
Bush has said the cuts provided crucial support to the U.S. economy after the Sept. 11 attacks and the three-year decline in U.S. stocks.
But Kerry, who wants to roll back the cuts for households whose incomes top $200,000 a year, has said the cuts did little for the economy, and helped cause the federal budget to swing from a more than $100 billion surplus in 2001 to a projected deficit exceeding $400 billion this year.
posted by Richard at
Friday, August 13, 2004
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