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Will 'Dubya' be a good president.
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[QUOTE]Originally posted by Jay: [QB] Deal with this big boy. [QUOTE]When properly measured, the Bush tax cut costs at least $2.1 trillion over ten years, rather than the often-cited $1.6 trillion figure. The primary reason for the larger estimate is that it accounts for the extra federal interest costs automatically generated by the tax cut. If the full effect of the rate cuts are accelerated forward to this year and are not offset by reductions in the remainder of the tax package, the costs would increase an additional several hundred billion dollars over 10 years. A tax cut of more than $2 trillion would exceed the surplus that is likely to be available outside Social Security and Medicare when realistic budget assumptions are used.[/QUOTE] [QUOTE]How are the Benefits of the Bush Tax Plan Distributed? The package of tax cuts President Bush has proposed are heavily skewed toward those at the top of the income spectrum. The broad middle class would receive substantially less relief. <ul> [*]The one percent of the population with the highest incomes would receive between 36 percent and 43 percent of the tax cut, depending on the calculation used. The bottom 80 percent of the population would receive 29 percent of the tax cut. [*]The Bush plan will deliver an average tax reduction of at least $39,000 to the top one percent of the population. This is 24 times the tax cut of $1,600 that the Administration claims the typical family of four would receive. Moreover, the Administration's family is hardly typical. Citizens for Tax Justice has found that nine out of ten households would receive a tax cut of less than $1,600. [*]The Treasury Department has reported that the top one percent of the population pays 20 percent of all federal taxes under current law. Under the Bush plan, the share of the tax cut that would go to the top one percent � 36 percent to 43 percent � is about double the share of the federal taxes they pay. [*]The proposal would repeal the estate tax, even though IRS data show that the estate tax is levied only on two percent of all estates and that in 1997 half of all estate taxes were paid by the 2,400 largest taxable estates. If the estate tax had been repealed in 1997, these 2,400 estates would have received an average tax cut of about $3.5 million apiece. In addition, of those estates that are subject to tax, very few include family-owned farms or businesses. Of the approximately 2.3 million people who died in 1998, only 47,482 (or two percent) left estates subject to any estate tax. Only 1,418 of the estates that were taxable � or three percent of them � were estates in which family-owned businesses or farms formed the majority of the estate. This means that only six of every 10,000 people who died in 1998 left an estate that was taxable and consisted primarily of a family-owned farm or business. A Treasury analysis found that these estates paid less than one percent of all estate taxes. Estate tax relief can be directed at these estates at a small fraction of the cost of repealing the estate tax. [*]White House officials have claimed that lower-income families would receive the largest percentage tax reductions. Such claims focus only on income taxes. Low- and moderate-income families pay more in other federal taxes � principally payroll taxes � than in income taxes. It is possible to eliminate a large percentage of the small income tax liability that many moderate-income families incur and register only a small impact on the total federal taxes that such families pay. </ul> For example, a two-parent family of four with income of $26,000 would indeed have its income taxes eliminated under the Bush plan, which is being portrayed as a 100 percent reduction in taxes. The family, however, owes only $20 in income taxes under current law. As a percentage of all taxes paid (considering only the effects of income and payroll taxes and counting the benefits the family would receive from the Earned Income Tax Credit), the family would have its taxes reduced by less than one percent. Its net tax bill would still exceed $2,680.(1) Figures that the Bush campaign issued, which showed the top one percent receiving a smaller share of the tax cut than the share of taxes this group pays, reflected only federal income taxes. Those figures omitted payroll, estate, and other taxes. As a result, the figures provided an incomplete picture. Leaving payroll taxes out of the analysis makes the share of taxes that the top one percent pays look larger, while leaving out the estate tax makes the share of the tax cut they will receive appear smaller.[/QUOTE] From the Center on Budget and Policy Priorities [/QB][/QUOTE]
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