Focus Point - Bad Tax TipsCommentary by Pete du Pont
March 16, 2001
I'm Pete du Pont with the National Center for Policy Analysis. How much would you get from a Bush tax cut plan? Don't bother checking the distribution table from the treasury to find out.
Treasury's Office of Tax Analysis uses "family economic income," instead of the adjusted gross income everyone reports on their tax return. This adds phantom income most Americans don't know they have.
For example, treasury makes up a number for unreported and underreported income and adds it to AGI. Last year, it totaled $744 billion.
It adds changes in net worth -- in effect assuming everyone sells all their stock every year and pays taxes on the gains.
It adds in, currently, employee contributions to IRAs and other retirement plans.
Finally -- you'll love this one -- if you own a home that would rent for $1,000 a month, it adds 12,000 phantom dollars to your annual income.
Thus, all Americans appear about 50 percent richer than they are, causing most tax cuts to appear skewed toward the rich.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont, and I'll see you next time.