Tuesday :: Jun 3, 2003

Two Studies Confirm Bush Tax Cuts Shift Tax Burdens From Rich to Middle Class

by Steve

Those wanting to know how to beat back additional Bush tax cut schemes and run against his policies next year need look no further than tomorrow’s page one story in the Washington Post. Studies by the Brookings and Urban Institutes and Citizens for Tax Justice confirm what many have suspected about the Bush tax cuts but few Democrats have had the guts to hammer repeatedly: the Bush tax cuts will transfer a larger burden from the wealthy to the middle class by the end of the decade.

Three successive tax cuts pushed by President Bush will leave middle-income taxpayers paying a greater share of all federal taxes by the end of the decade, according to new analyses of the Bush administration's tax policies.

The result is that a broad swath of lower-middle, middle- and upper-middle-income people, as well as some rich Americans, will carry a greater share of the federal tax burden after the laws passed in the past three years are fully implemented. While taxes are scheduled to decline for all income groups, those earning more than $28,000 but less than $337,000 will end up paying a greater share of the taxes than they did before the changes.

The findings, by two groups that have been critical of the Bush administration's tax policies, add a new wrinkle to the increasingly contentious debate over the fairness of Bush's tax policies and which income groups would benefit most. Liberal groups have argued that the Bush administration is penalizing the poor while rewarding the rich. In part to answer those critics, Republicans have targeted the poor with expanded tax refund checks for families with children, a new 10 percent tax bracket and a larger earned-income credit for married couples who are poor.

The result may be a surprise to both sides: By the end of the decade, the middle class will be picking up a greater share of the government's tab.

Well, no. Perhaps it is a surprise to the Washington Post, but not to the uneducated unwashed masses out here beyond the Beltway.

Conservatives and liberals alike agree that Bush's tax policies have shifted more of the tax burden to the middle class. Kevin Hassett, a conservative economist with the American Enterprise Institute, said it "makes complete sense" that this would happen as a result of Bush's policies. Changes such as the elimination of the estate tax and the reduction of the stock-dividend tax disproportionately benefit the wealthiest 1 percent, who have the largest amount of assets and capital. Those at the other end of the income spectrum benefit disproportionately from targeted tax cuts such as the child tax credit. With the biggest gains going to the wealthiest and to low-income taxpayers, those in the middle inevitably get a higher tax burden because they don't qualify for the targeted tax breaks that go to the poor or the investment-related tax breaks that go to the wealthy. "The middle class is predominantly labor income," Hassett said.

Right. And Bush is successfully waging war on the working classes in this country, so a little class warfare directed right back at him is very appropriate.

So exactly why would any Democrat continue to vote for any more Bush tax cuts in light of this information?

Steve :: 9:37 PM :: Comments (5) :: Digg It!