Author: Alex Welch

June 5, 2003 04:05 PM | Permalink |

The tax cut plan approved by House and Senate negotiators last night offers the wealthiest one percent of Americans an average of almost $100,000 in tax reductions each over the next four years. At the same time, the final bill sharply scales back the already modest middleincome tax cuts included in earlier bills, by phasing out those provisions after two years.

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June 3, 2003 03:40 PM | Permalink |

Increasing the percentage used to compute the refundability of the child credit from 10% to 15% would help 6.5 million families with 11.9 million children nationwide this year and next. That represents one out of six families with children under 17 whose family incomes do not exceed the income phase-out for the credit.

A provision to increase the refundability percentage for the credit was included in the Senate-passed version of the tax bill. But that provision was not in the House-passed bill or the original Bush proposal, and was dropped in the final plan.

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May 29, 2003 03:42 PM | Permalink |

The highly-touted temporary increase in the per-child tax credit to $1,000 for 2003 and 2004 will provide no benefit to one out of four families with children under 17, because they do not earn enough to qualify for the aid.

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May 16, 2003 04:19 PM | Permalink |

The tax cut plan approved by the Senate late last night offers the best-off one percent of Americans a $69,000 tax reduction over the next four years. That’s two-thirds more than the bill reported by the Senate Finance Committee on May 8. The key change in the bill is a vastly expanded dividend tax break, which passed the Senate by a 51-50 vote, with Vice-President Dick Cheney breaking the tie.

Assuming that the bill’s supposedly temporary measures are actually extended past their alleged “sunset” dates, the bill is likely to cost close to a trillion dollars over the upcoming decade — almost three times the bill’s jokingly advertised cost of $350 billion. Most notably, extending the dividend exemption past 2006 would raise its ten-year cost by at least $250 billion and extending the bill’s alternative minimum tax relief past 2005 would cost more than $300 billion over the same period.

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May 14, 2003 12:20 PM | Permalink |

The economic stimulus bill proposed by Senate Democratic Leader Tom Daschle (D-SD) provides a bigger immediate boost to the economy and larger tax cuts for most taxpayers over the next two years than competing plans approved by Republicans in the House and on the Senate Finance Committee. At the same time, the Democratic plan avoids the huge increase in long-term federal borrowing that the Republican plans entail.

A computer analysis of the tax provisions of the Democratic plan by the Institute on Taxation and Economic Policy finds:

Over the next two years, the Democratic plan offers an average tax cut of $575 to middle- and low-income taxpayers. That compares to only $347 under the House bill and $215 under the Senate Finance Committee bill.

More than 43 percent of the tax cuts in the Democratic plan over the next two years would go to taxpayers in the bottom three-fifths of the income scale. In contrast, the House bill offers these 80 million families and individuals only 9.2 percent of its tax cuts over the next two years. The Senate GOP plan provides them with only 10 percent of its tax cuts.

The House GOP plan would provide the best-off one percent of all taxpayers with an average of $72,106 in tax cuts over the next two years. The Senate GOP plan gives this group an average of $28,005 over two years. The Senate Democratic plan provides $2,301 in tax relief to the wealthiest families.

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May 13, 2003 04:21 PM | Permalink |

The tax bill approved by the Senate Finance Committee on May 8 and scheduled for Senate debate this week would borrow $350 billion over the upcoming decade to finance still more tax reductions. More than half of the tax cuts would go to the best-off 10 percent.

A computer analysis of the Finance Committee plan by the Institute on Taxation and Economic Policy finds that over the bill’s first four years:

• More than fifty percent of the total tax cuts would go to the best-off 10 percent of all taxpayers.
• In contrast, the bottom 60 percent of taxpayers would get only 11.9 percent of the tax cuts, averaging about $100 a year over the next four years.
• The average tax reduction for the richest one percent over the next four years would total $41,117. This tiny but wealthy group would enjoy almost a fifth of the tax cuts over the four years.

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May 6, 2003 04:22 PM | Permalink |

Most of the $550 billion that the House Ways and Means Committee would borrow to pay for the tax-cut bill it marked up today is targeted to benefit the best-off five percent of Americans. A computer analysis of the plan by the Institute on Taxation and Economic Policy finds that over the bill’s first four years (when almost all of its 10-year cost would be incurred):

Fifty-two percent of the total tax cuts would go to the best-off five percent of all taxpayers.

In contrast, the bottom 60 percent of taxpayers would get only 9 percent of the tax cuts.

The average four-year tax reduction for the richest one percent over the four years would total $133,557. This tiny but wealthy group would enjoy a third of the tax cuts over the four years. Starting in 2006, the top one percent would get more than half of the bill’s total tax cuts.

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March 18, 2003 05:15 PM | Permalink |

 

According to the latest figures from the congressional Joint Committee on Taxation, President Bush’s fiscal 2004 budget includes $1.6 trillion in additional tax cuts over the upcoming decade. Counting the $0.4 trillion in added interest on the national debt that the tax cuts will entail, the total cost over the fiscal 2003-13 period will be almost $2 trillion if the plan is adopted by Congress—$100 billion more than the administration previously estimated.

In comparison, the Bush tax cut plan enacted in 2001 was projected to cost $1.6 trillion over its first decade including interest.

In the current fiscal year, the Joint Committee data show that the President’s new tax cut plan will cost $41 billion, thus providing virtually no stimulus to our ailing economy. But by fiscal 2013, Bush’s new tax cut proposals will cost $431 billion a year including interest.

“If the President’s new tax cuts are enacted, it appears that our national debt will approach $10 trillion by the end of 2013, counting the amount owed to the Social Security trust fund,” said Robert S. McIntyre, director of Citizens for Tax Justice.

When Bush took office, the national debt, including the amount owed to Social Security, was $4.5 trillion and headed sharply down. But Bush’s new budget projects a $7.5 trillion debt by the end of 2008, including amounts owed to Social Security. The President refuses to offer an estimate for the size of the debt a decade from now, but the likely figure under the President policies is close to $10 trillion.

“So much for the President’s worthless promise not to send the bill for his irresponsible tax-cutting program to our children,” McIntyre said.

Click here to see this analysis in PDF format.

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March 13, 2003 04:11 PM | Permalink |

An editorial in the March 13, 2003 Wall Street Journal repeats the Bush administration’s claim that the President’s proposal to eliminate taxes on dividends would be a bonanza for the elderly. That’s not true.

The administration and the Journal get only one, irrelevant statistic right: almost half of taxable dividends are received by seniors. But there are a number of other, more telling facts that the administration and the Journal choose to ignore.

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February 3, 2003 05:16 PM | Permalink |

According to Bush administration figures, the President’s new budget released today calls for $1.5 trillion in additional tax cuts over the upcoming decade. Counting the added interest on the national debt that the tax cuts will entail, the total cost over the fiscal 2003-13 period will exceed $1.8 trillion if the plan is adopted by Congress.

In comparison, the Bush tax cut plan enacted in 2001 was projected to cost $1.6 trillion over its first decade including interest.

Tax Cuts Proposed in Bush’s New Budget
$-billions
Fiscal years	New Tax Cuts	Added Interest	Total Cost
2003	$ –31	$ +1	$ –32
2004	–110	+5	–115
2005	–109	+11	–120
2006	–102	+17	–120
2007	–85	+23	–109
2008	–87	+29	–116
2009	–80	+36	–115
2010	–83	+42	–125
2011	–145	+50	–196
2012	–315	+66	–380
2013	–331	+87	–418
2003-13 Total	$ –1,479	$ +367	$ –1,846
FY 2003-08 year-by-year tax-cut figures are from the Bush administration. FY 2009-13 year-by-year tax-cut details (matching the administration’s total figure for those years) and added interest for all years were estimated by CTJ

In the current fiscal year, the President says his new tax cut plan will cost $32 billion, thus providing virtually no stimulus to our ailing economy. But by fiscal 2013, the President’s budget figures show that his new tax cut proposals will cost $418 billion a year including interest.

“If the President’s new tax cuts are enacted, it appears that our national debt will approach $7 trillion by the end of 2013,” said Robert S. McIntyre, director of Citizens for Tax Justice, who added up the administration’s tax cut proposals.

When Bush took office, the national debt was $3.5 trillion and headed towards extinction. Bush’s new budget projects a $5 trillion debt by the end of 2008. The administration refuses to offer an estimate for the size of the national debt a decade from now, but the likely figure under the President’s policies is close to $7 trillion.

“So much for the President’s worthless promise not to send the bill for his irresponsible tax-cutting program to our children,” McIntyre said.

Click here to see this analysis in PDF format.

 

 

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