MIDDLE CLASS PAYS SMALLER SHARE OF TAXES
August 18, 2004
Contrary to some media reports, the report from the Congressional Budget Office (CBO) shows that Bush's tax cuts served to decrease, not increase, the share of taxes paid by middle-class income earners, says Investor's Business Daily.
Under the old tax law, the top 20 percent of all income earners would have paid 64 percent of all federal taxes in 2005, according to the CBO report. As a result of the Bush tax cuts, this share is projected to rise to 64.3 percent. In addition:
- The CBO reports states the effective federal tax burden for the middle 20 percent of all earners will actually rise sharply by 2014 -- to just below 29 percent, up from 24 percent today.
- According to the Heritage Foundation, the federal tax burden of the middle 20 percent of income earners dropped from 16.5 percent to 14.6 percent as a result of the Bush tax cuts.
Moreover, a growing number of poor and middle-class people pay no income tax at all -- in 2004 there were 44 million zero-tax filers, up from 26.7 million as recently as 1995.
Source: Editorial, "Tax Trickery," Investor's Business Daily, August 17, 2004; based upon "Effective Federal Tax Rates Under Current Law, 2001 to 2014," Congressional Budget Office, August 2004.
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