News Release

Tax Cut: Who Benefits?


McIntyre is director of Citizens for Tax Justice, which has the only computer model outside the government capable of a detailed analysis of the effects of the proposed tax cuts. CTJ has a series of reports on its website, including the newly released “Distributional Effects of the Senate Finance Committee-Passed Version of the Bush Tax Plan.” Among its findings: While the top 1 percent of Americans — those making $373,000 or more — will get a tax cut averaging $44,293, the bottom 60 percent — those making less than $44,000 — will get an average of a $330 cut.
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Professor of economics at Wheaton College in Massachusetts and a contributing editor at Dollars & Sense magazine, Miller said today: “The Senate Finance Committee-approved $1.35 trillion tax cut currently being considered by the full Senate remains a tax giveaway to the wealthy. Even that version of the Bush tax cut — which is slightly more equitable because it would cut the top income tax bracket by less and would expand the number of working families eligible for the child tax credit — awards 35 percent of its benefits to the richest 1 percent of taxpayers, all with incomes over $373,000 per year, giving them an average tax cut of over $122 per day, while the bottom 60 percent of taxpayers get just 19.9 percent of the tax cut, or an average tax cut of less than $1 per day. Also, the Senate Finance Committee tax cut, when its costs are properly accounted for, would still effectively drain the usable portion of the projected surpluses in the Federal Budget for the next 10 years, foreclosing the possibility of using those monies to address pressing social needs: from providing prescription drug coverage to seniors, to insuring many of those who currently go without health insurance and lifting children out of poverty. For instance, the $580 billion of this tax cut that will go to the richest 1 percent alone would pay for three-quarters of the cost of providing universal prescription drug coverage for seniors…. By cutting income tax rates and repealing the estate tax, the only progressive taxes in our tax code, the Senate tax cut proposal will accomplish the other major goal of the Bush administration: to saddle us with a more regressive tax code that will place a larger portion of the burden of financing government on families who work for wages.”
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Communications director of United for a Fair Economy and co-author of Shifting Fortunes: The Perils of the Growing American Wealth Gap, Leondar-Wright said: “How rapidly candidate Bush’s slogan ‘Leave no child behind’ morphed into President Bush’s efforts to leave no millionaire behind! Given the many cuts in children’s programs and the tax cuts skewed towards the very rich, the Bush budget entails a redistribution of wealth from children to the wealthiest heirs. Children with multimillionaire parents may enjoy a tax-free inheritance, but the other 98 percent of children will be out of luck.”
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For further information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167