BUSH TAX CUTS PUT GREATER TAX BURDEN ON UPPER CLASS
April 14, 2005
Some claim that tax cuts just benefit the rich, but President Bush's tax cuts will increase the share of taxes paid by higher-income taxpayers in 2005, according to a new government report.
The Department of the Treasury finds that a small group of higher-income taxpayers already pay most of the individual income taxes each year:
- In 2002, the last year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, even though they reported one-third (30.6 percent) of income.
- Taxpayers who rank in the top 50 percent of taxpayers pay virtually all individual income taxes (about 96 percent).
In 2005, when most of the provisions are in effect, Bush's tax cuts have shifted a larger share of the individual income taxes paid to higher income taxpayers:
- The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.
- The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.
- The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent.
Source: "Fact Sheet: Who Pays the Most Individual Income Taxes?" Department of the Treasury, Office of Public Affairs, March 2, 2005.
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