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News :: Elections & Legislation |
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OUTRAGEOUS!--Who Gets What From House GOP Tax Cut Plan: Richest One-Tenth Of One Percent Of Population To Recieve Half Of Entire Tax Cut |
Current rating: 0 |
by Isaac Shapiro
(No verified email address) |
09 May 2003
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Millionaires would receive approximately $139 billion in tax cuts through 2013. This is essentially the same amount of tax cuts that would be received by the entire bottom 89 percent of households combined. In 2003, there will be 184,000 millionaires comprising 0.1 percent of households. |
Taxpayers with incomes of more than one million dollars —referred to here as “millionaires” — would reap huge and disproportionate gains from the tax plan that was adopted May 6 by the Ways and Means Committee of the House of Representatives. As a result of the bill’s personal income tax cut provisions (and not counting the benefits these individuals might receive from the bill’s substantial tax cuts for businesses):
* Millionaires would receive approximately $139 billion in tax cuts through 2013. This is essentially the same amount of tax cuts that would be received by the entire bottom 89 percent of households combined. In 2003, there will be 184,000 millionaires comprising 0.1 percent of households. (This analysis relies on distributional estimates of the plan by the Urban Institute-Brookings Institution Tax Policy Center and estimates of the revenue loss the plan would cause from the Joint Committee on Taxation.)
* Millionaires would receive average tax cuts of about $93,500 this year, far in excess of those received by other groups. The middle fifth of households would receive tax cuts averaging $217 in 2003.
* Millionaires would experience the largest after-tax incomes increases of any group. In 2003, the percentage increase in the after-tax incomes of the millionaire group (4.4 percent) would be five times the percentage increase in the after-tax income of the middle fifth of households (0.8 percent).
* The share of the individual income tax cuts received by millionaires (27 percent) also significantly exceeds the share of income taxes they pay (19 percent). It far exceeds the share of all federal taxes they pay.
* Millionaires would benefit primarily from two parts of the bill. Between now and 2013, they would gain $107 billion from the provision to cut the capital gains tax rate and taxes on dividend income. The Tax Policy Center’s analysis finds that 39 percent of the tax cuts from this provision would go to millionaires. The large majority of the remaining $32 billion in tax cuts they would receive would come from accelerating the rate reductions now scheduled for 2006 into 2003.
How these estimates were made and why the amount to millionaires may be somewhat understated
The Tax Policy Center has published a series of tables on the distribution of the Ways and Means bill. Tax filers are categorized by “adjusted gross income,” an income measure derived from tax returns that includes deductions that have the effect of lowering income levels. The Tax Policy Center examines the bill’s effects on “filing and non-filing tax units,” which are referred to in this analysis by the shorthand of “households.” The Tax Policy Center estimates there will be 184,000 households with incomes above one million dollars in 2003, or 0.13 percent of households.[*] The bottom 89 percent of households equate to 124 million households.
This analysis calculates the benefits of the Ways and Means bill to millionaires by applying the distribution of the tax cuts estimated by the Tax Policy Center and the cost of the tax cuts as estimated by Congress’ Joint Committee on Taxation. Since the Tax Policy Center and the Joint Committee use somewhat different models to estimate the effects of tax proposals, mixing the two together yields some imprecision. But the fundamental story told by the estimates — that the total amount of tax cuts in the Ways and Means bill received by a relatively small number of millionaires will be as large as the total amount of the tax cuts received by the vast majority of other households — is certain to be on the mark. The Tax Policy Center distributional figures have been widely cited and are well-respected. The Joint Committee on Taxation’s estimates are the official cost estimates of the proposal.
[*] The actual number of households having more than one million dollars will not remain constant from 2003-2013. Also, some households will be millionaires one year but not the next. This analysis assumes the proportion of all households that are millionaires remains the same in the 2004-2013 period as the Tax Policy Center estimates for 2003, as does the proportion of income they receive. If income becomes more concentrated than this, the findings of this analysis will turn out to be understated; if income becomes less concentrated, the findings will be overstated.
http://www.cbpp.org/5-7-03tax.htm |
See also:
http://www.cbpp.org/5-7-03tax.pdf
http://www.cbpp.org/econstim.htm
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Re: OUTRAGEOUS!--Who Gets What From House GOP Tax Cut Plan: Richest One-Tenth Of One Percent Of Population To Recieve Half Of Entire Tax Cut |
by Jack Ryan
(No verified email address) |
Current rating: -2
10 May 2003
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Dear Issac,
The bottom 89% pay less than 30% of all taxes, yet recieve and overwhelming amount of the benefits. The bottom 50% of earners pay virually nothing in taxes. It's pretty hard to reduce taxes for those who do not pay taxes. Would'nt you agree?
Jack |
