Battlepanda: Who wins with Bush's tax cuts?


Always trying to figure things out with the minimum of bullshit and the maximum of belligerence.

Wednesday, November 16, 2005

Who wins with Bush's tax cuts?

Well, we all know. Still it's nice to see it in pictorial form. The blue sqiggly line represent the the marginal tax rate (the rate at which the last dollar a famil earns is taxed) families face if the Bush tax cuts are made permanent. The red squiggly line represent the marginal tax rate on families if they are phased out as planned.
(Content lifted wholesale fromMark Thoma)
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(Do graphs like this make you glaze over? I know it happens to me all the time. But do take the extra 15 seconds or so to make sense of this one. It's the gift that keeps on giving.)

From the Congressional Budget Office report on Marginal Tax Rates, emphasis mine:
If tax provisions enacted in 2001, 2003, and 2004 expire as scheduled over the next five years, marginal rates will increase across most of the income distribution. Compared with a fully phased-in version of existing law, expiration would raise effective marginal tax rates by an average of almost 3 percentage points. Roughly half of taxpayers would face higher marginal rates; most other taxpayers would see no change in their marginal rates.

So, basically, middle-class families get bupkis. Some poorer families get significant savings. But the only group that is guarenteed to do well by making the Bush tax cuts permanent are the really, really rich (and we're talking about $230,000+/year income families here -- within the top one percent, I think).
As a bonus, over atMark's, Bruce Web observed: "Kind of put Steve Forbe's 17% Flat Tax proposal in proportion [when] "most taxpayers face effective marginal rates of 15 percent or less". Nice. Very nice.