Tax Burden Shifts to the Middle

[Jobber of the Week 0]

http://www.washingtonpost.com/wp-dyn/artic...-2004Aug12.html

 

Tax Burden Shifts to the Middle

Presidential Campaigns Draw Differing Conclusions From Report

 

By Jonathan Weisman

Washington Post Staff Writer

Friday, August 13, 2004; Page A04

 

Since 2001, President Bush's tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.

 

The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.

 

Over that same period, taxpayers with incomes from around $51,500 to around $75,600 saw their share of federal tax payments increase. Households earning around $75,600 saw their tax burden jump the most, from 18.7 percent of all taxes to 19.5 percent.

 

The analysis, requested in May by congressional Democrats, echoes similar studies by think tanks and Democratic activist groups. But the conclusions have heightened significance because of their source, a nonpartisan government agency headed by a former senior economist from the Bush White House, Douglas Holtz-Eakin. The study will likely stoke an already burning debate about the fairness and efficacy of $1.7 trillion in tax cuts that the president pushed through Congress.

 

"CBO is nonpartisan, it's independent, and right now it works for a Republican Congress with a former Bush economist at its head," said Jason Furman, economic director of the presidential campaign of Sen. John F. Kerry (D-Mass.). "There's no higher authority on the subject."

 

Girding for the study's release, Bush campaign officials have already begun dismissing it as "the Democrat-requested report."

 

"The CBO answers the questions they are asked," said Terry Holt, a Bush campaign spokesman. "To the extent the questions are shaded to receive a certain response, that's often the response you get."

 

The question posed was a standard request for analysis of the type members on both sides of the aisle routinely make of the CBO. In this case the ranking Democrats on the House Ways and Means Committee, the Senate Finance Committee, the House and Senate budget committees and the Joint Economic Committee asked Holtz-Eakin -- the former chief economist of Bush's Council of Economic Advisers -- to estimate the distribution of the tax cuts among income levels, and compare that to tax levels if none of the cuts were passed.

 

The conclusions are stark. The effective federal tax rate of the top 1 percent of taxpayers has fallen from 33.4 percent to 26.7 percent, a 20 percent drop. In contrast, the middle 20 percent of taxpayers -- whose incomes averaged $51,500 in 2001 -- saw their tax rates drop 9.3 percent. The poorest taxpayers saw their taxes fall 16 percent.

 

Republican aides on Capitol Hill, speaking on condition of anonymity, said the tax cuts actually made federal income taxes -- as opposed to total taxes -- more equitable.

 

They point to a different set of numbers within the CBO study that show that the rich are actually paying more in individual federal income taxes. If Social Security, Medicare and other federal levies are excluded, the rich are paying a higher share of income taxes this year than they would have paid with no tax changes, the CBO found. If none of the tax cuts had passed, the top 20 percent would pay 78.4 percent of income taxes this year. Instead, they will pay 82.1 percent. In contrast, the middle-class share of income taxes dropped to 5.4 percent, from 6.4 percent if no tax cuts had passed.

 

"Are the rich paying their fair share?" asked one GOP aide. "Yeah. They're paying more."

 

But to Democrats, the conclusion was clear. For the bottom 20 percent of households, the combined Bush tax cuts averaged $250 each. The middle 20 percent received $1,090, while the top 1 percent garnered $78,460, said Democrats on the Joint Economic Committee who analyzed the report.

 

The tax cuts this year will boost the income of millionaires by 10.1 percent, while middle-income families see a boost of 2.3 percent, the Democrats said.

 

Congressional Republican aides said the CBO analysis has its limitations. For instance, it assumes that the beneficiaries of business tax cuts passed in 2002 and 2003 are the taxpayers who own stocks, bonds and other stakes in the businesses that received the reductions. But that analysis does not consider new workers hired because of the tax cuts, or higher wages that may have been granted because of the boost to the bottom line.

 

It also does not reflect that during the 1990s, the tax rates on lower-income households fell considerably due to an expansion of the earned income tax credit and other forms of low-income relief. In that sense, GOP aides said, tax cuts for the wealthy were overdue.

 

Besides, Holt said, looking narrowly at the distribution of tax cuts ignores the broader benefits -- such as investment, consumer spending, and job creation -- that flow from leaving more money in people's hands and that are spread far more evenly through the economy.

 

"Tax relief is about fairness, but it's also about economic growth," he said. "So the president's tax relief was both fair and effective, when it comes to bringing us from recession to growth."

 

But Republicans predicted that Kerry will make the report a major political event, and Furman said the results will be too stark to spin.

 

"This is the first really detailed government report that says not only did the wealthy get an enormous tax cut, but, if the conclusions are what we expect, the middle class will be left paying a larger proportion of the taxes than they were before," he said.

 

So there we go. Even the CBO says that Bush's tax cuts have shifted the load of taxes to the middle class.

 

Are some of you dweebs (you know who you are) still going to argue that the rich are paying too much in taxes?

[Stephen Joseph 0]

It's never bothered me the rich pay more...they benefit the most from the property protection rights due to the government

 

but then again, I don't think you were speaking to me, were you?

[Justice 0]

The conclusions are stark. The effective federal tax rate of the top 1 percent of taxpayers has fallen from 33.4 percent to 26.7 percent, a 20 percent drop. In contrast, the middle 20 percent of taxpayers -- whose incomes averaged $51,500 in 2001 -- saw their tax rates drop 9.3 percent. The poorest taxpayers saw their taxes fall 16 percent.

 

Republican aides on Capitol Hill, speaking on condition of anonymity, said the tax cuts actually made federal income taxes -- as opposed to total taxes -- more equitable.

 

They point to a different set of numbers within the CBO study that show that the rich are actually paying more in individual federal income taxes. If Social Security, Medicare and other federal levies are excluded, the rich are paying a higher share of income taxes this year than they would have paid with no tax changes, the CBO found. If none of the tax cuts had passed, the top 20 percent would pay 78.4 percent of income taxes this year. Instead, they will pay 82.1 percent. In contrast, the middle-class share of income taxes dropped to 5.4 percent, from 6.4 percent if no tax cuts had passed.

 

"Are the rich paying their fair share?" asked one GOP aide. "Yeah. They're paying more."

 

Uh, that's in your own article...

 

...Dweeb.

[Jobber of the Week 0]

Yes, that's the generic Republican response to a non-partisan inquiry. I'm sure we'll hear it in the echo chamber (Fox, talk radio, etc) soon enough.

[Justice 0]

Yes, that's the generic Republican response to a non-partisan inquiry. I'm sure we'll hear it in the echo chamber (Fox, talk radio, etc) soon enough.

Oh God. Generic being supported by the inquiries own statistics, right? Talk about a weak response...

 

And hell, the poorest saw their tax burden go down 16%. Don't see you taking notice for your own constituency getting benefits.

[Guest MikeSC]

Umm ---

 

the top 20% pay 63.5% of ALL taxes.

 

How, precisely, is the burden of all of this on the middle class, since the remaining 80% pay a whopping 36.5%?

-=Mike

[teke184 0]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

 

 

Yes, I KNOW this is changing the subject a bit, but I find it laughable that Kerry is trying to pass himself off as an average joe when he was educated in European boarding schools and is married to a multi-billionaire.

[Guest MikeSC]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

 

 

Yes, I KNOW this is changing the subject a bit, but I find it laughable that Kerry is trying to pass himself off as an average joe when he was educated in European boarding schools and is married to a multi-billionaire.

And only one of the three, arguably, had to do ANY work to get his fortune.

-=Mike

[Styles 0]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

 

 

Yes, I KNOW this is changing the subject a bit, but I find it laughable that Kerry is trying to pass himself off as an average joe when he was educated in European boarding schools and is married to a multi-billionaire.

It's almost as laughable as John Edwards trying to pass himself off as the poor son of a millworker, who lives a humble life fighting for the weak out of the goodness of his heart.

[Guest thebigjig]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

 

 

Yes, I KNOW this is changing the subject a bit, but I find it laughable that Kerry is trying to pass himself off as an average joe when he was educated in European boarding schools and is married to a multi-billionaire.

It's almost as laughable as John Edwards trying to pass himself off as the poor son of a millworker, who lives a humble life fighting for the weak out of the goodness of his heart.

Well... ummm, John Edwards was born poor and to a millworker...

 

and I suppose this seems more disgusting than Bush trying to pass himself off as a blue collar everyman who got to where he is today by hard work and crawling his way to the top?

[Guest Brian]

What's the income of the top twenty percent? How proportionate is it?

[kkktookmybabyaway 0]

Well, I, too, was born with the sperm of a blue-collar mill worker.

 

So I guess that means everything I say must be the truth as well. Cool.

 

If only my old man served in Vietnam for four months, I would be some sort of super-hero...

[Guest thebigjig]

Well, I, too, was born with the sperm of a blue-collar mill worker.

 

So I guess that means everything I say must be the truth as well. Cool.

 

If only my old man served in Vietnam for four months, I would be some sort of super-hero...

I never said everything he said was the truth...

 

I'm just pointing out that both candidates are presenting what could be a false image

[kkktookmybabyaway 0]

But, but I'm the son of a steel mill worker damnit!

 

Whatever I say goes, and you sir are a commie-facist (if one can exist...)

[Jobber of the Week 0]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

From fortune magazine, here's what a bunch of recent politicians would keep if they had a divorce:

 

President Net wealth (in millions)

Bill Clinton $0.93

Gerald Ford $1.1

Richard Nixon $1.3

John Kerry $1.6

George H.W. Bush $2.0

Jimmy Carter $2.2

Ronald Reagan $4.8

George W. Bush $13

Lyndon B. Johnson $19

[BX 0]

I'll disregard that, Slapnuts. If you'd spend a week in Robbins, you'd know how fucking remarkable it is for someone like John Edwards to get out of a place like that.

[Guest MikeSC]

Anyone ELSE find it ironic that three of the people yelling the most about how the rich are BUTT-surfing the poor (Kerry, Edwards, and Ted Kennedy) are three of the RICHEST people in politics?

From fortune magazine, here's what a bunch of recent politicians would keep if they had a divorce:

 

President Net wealth (in millions)

Bill Clinton $0.93

Gerald Ford $1.1

Richard Nixon $1.3

John Kerry $1.6

George H.W. Bush $2.0

Jimmy Carter $2.2

Ronald Reagan $4.8

George W. Bush $13

Lyndon B. Johnson $19

I take it the relevance of this will be apparent at some point, right?

-=Mike

[Guest GreatOne]

Not to mention that you could omit the non-living from that list.

[Jobber of the Week 0]

I take it the relevance of this will be apparent at some point, right?

-=Mike

Well, let's see. Teke was saying a bunch of rich guys are the ones who want to tax the rich and how suspicious that is. Taking out the irrelevant names.

 

 

President Net wealth (in millions)

John Kerry $1.6

George W. Bush $13

 

Make more sense?

[Justice 0]

I take it the relevance of this will be apparent at some point, right?

      -=Mike

Well, let's see. Teke was saying a bunch of rich guys are the ones who want to tax the rich and how suspicious that is. Taking out the irrelevant names.

 

 

President Net wealth (in millions)

John Kerry $1.6

George W. Bush $13

 

Make more sense?

Simple question: Does that include net worth of spouses as well? Because I'm sure Heinz has much more money than that...

[teke184 0]

Heinz' fortune, real or inheritable, is in the BILLIONS range. Considering that her hubby was also born with a silver spoon in his mouth, him talking about helping lower classes is laughable.

 

 

Edwards, OTOH, has room to talk considering his background. I just mentioned him earlier because he's still pretty rich to be talking about the mythical "they" who should be paying a bigger share of the taxes.

[Guest MikeSC]

I take it the relevance of this will be apparent at some point, right?

      -=Mike

Well, let's see. Teke was saying a bunch of rich guys are the ones who want to tax the rich and how suspicious that is. Taking out the irrelevant names.

 

 

President Net wealth (in millions)

John Kerry $1.6

George W. Bush $13

 

Make more sense?

Except that Kerry happens to have a wife worth a shade over 1 BILLION DOLLARS, which is a slight difference.

 

And that was after divoring ANOTHER exceptionally rich person.

 

But, hey, I'm sure her money doesn't REALLY benefit him...

-=Mike

[EricMM 0]

Just because you're rich doesn't mean you can fight for poor people.

 

Hey, here's a clue, a poor person will NEVER become president. It's expensive

[Guest MikeSC]

Just because you're rich doesn't mean you can fight for poor people.

 

Hey, here's a clue, a poor person will NEVER become president. It's expensive

Just because you claim to fight for the poor doesn't mean you actually do. Kennedy simply uses the poor to try and make an image of himself as a do-gooder --- and not a drunk who kills women.

-=Mike

[EricMM 0]

Then argue that Kerry doesn't fight for the poor.

 

Don't argue that he's rich, or that his wife's rich.

 

We KNOW.

[Guest MikeSC]

Then argue that Kerry doesn't fight for the poor.

 

Don't argue that he's rich, or that his wife's rich.

 

We KNOW.

It's just ironic that the "best friends" of the poor are people who haven't had to do one thing to earn their money.

 

It's like when the Brit mentioned that it's odd that the loudest agitators for freedom also "tend to own negroes."

-=Mike

[EricMM 0]

But ironic or not, it doesn't MATTER.

 

Next time, base your arguments on fact, not irony Mike.

[Jobber of the Week 0]

Simple question: Does that include net worth of spouses as well? Because I'm sure Heinz has much more money than that...

No, this wasn't counting spouses, which is why I mentioned divorce when I quoted these Fortune figures.

 

The election is still like Paris Hilton vs Nicole Richie when it comes down to comparing the candidates to middle class incomes, but it always does.

[Guest MikeSC]

But ironic or not, it doesn't MATTER.

 

Next time, base your arguments on fact, not irony Mike.

Base your arguments on facts and not on meaningless cliches from interested parties, 'K?

-=Mike

[EricMM 0]

Alright here's a fact. Kerry has more to gain from the poor and even middle class than Bush does.

 

So it's fair to think that Kerry will do more to help ME than Bush will.