Friday, August 24, 2007

Tax cuts = Rich pay more

Link

OK, let's talk equity. It's almost an article of faith on Capitol Hill these days that the Bush tax cuts tilted the income tax system in favor of the rich. If this were true, it would be reflected in the actual data on the distribution of the income tax.

For the Bush tax cuts to have been a give-away to the rich, people paying the higher marginal tax rates would have to be carrying a smaller share of the income tax load. But the IRS data indicate that they are not paying less. Instead, they are paying more -- lots more. More surprisingly, the richest 1%, 5% and 10% of the taxpayers are shouldering a larger percentage of the income tax burden at the federal level than the tax estimators said they would had the Bush tax cuts never materialized. The data nearby tell the story.

The preliminary 2005 data just released from the Treasury Department show more of the same. The amount of tax paid by those earning more than $1 million a year increased to $236 billion in 2005, up from $132 billion in 2003, the year of the tax cut. This was a 78% increase in taxes paid by millionaire households.