tax cuts

With the expiration of the Bush tax cuts set for the end of this year, congress is trying to decide on whether or not to extend them and this has given us an opportunity to examine just who benefited from these cuts, as the Democrats have proposed retaining the tax cuts for those earning less than $200,000 per year.



Democratic plan is neither cheap nor paid for. Making permanent all tax cuts for the middle class will cost the Treasury $2.7 trillion over 10 years, according to the Joint Committee on Taxation, at a time when Washington has already added trillions



Keeping all of the tax cuts in force will cost 3.7 trillion.



Making permanent the 2001 and 2003 tax cuts and AMT relief would have a direct cost of $3.7 trillion over the next ten years (fiscal year 2009 through 2018),



This shows us that 2.7 divided by 3,7 or 72% of the tax savings went to those earning less than $200,000 per year leaving 28% for the so called rich. Now if we investigate who pays taxes we find that those earning more than $200,000 pay over 50%





Nationally, taxpayers earning under $50,000 collectively earned 22 percent of the nation's total AGI, but paid just 8 percent of all federal income taxes at an effective rate of 5 percent. Those making over $200,000 collectively earned 29 percent of total AGI but paid more than half of all federal income taxes at an effective rate of 22 percent.



To summarize the rich people (those with family incomes over $200,000 received 28% of the cuts under the Bush tax cuts and those same people still paid over 50% of all income tax. Since the inception of the Bush tax cuts they have been described as favoring the rich but I am not so sure that was accurate