How Poorer Families Benefit under the Bush Tax Plan
January 20, 2003
Contrary to assertions from the tax-the-rich crowd, the Bush tax plan will actually make the tax code more progressive, say observers. Proof is contained in income distribution data compiled by the Treasury Department.
Looking at the impact for 2003:
- The average reduction in income taxes is slightly more than 12 percent.
- But for those earning less than $30,000, it is about 17 percent -- while for those earning more than $100,000 it is 11.4 or less.
- The percent reduction for families with incomes under $50,000 is 14.5 percent -- and those families would pay a smaller share of the total income tax than currently do.
- Families with incomes over $100,000 would wind up paying a larger share of the total income tax -- 73 percent of all federal income taxes, in fact.
The Bush plan would remove 3.8 million lower-income taxpayers from the tax rolls altogether -- mainly due to the acceleration of the increase in the child tax credit from $600 to $1,000.
Due to widening exemptions, deductions and credits, fewer and fewer low-wage earners are paying any taxes at all -- which mean the tax burden increasingly becomes the responsibility of earners in higher brackets. According to IRS data from 2000, the top half of tax filers were responsible for 96 percent of all revenues.
Source: Editorial, "Lucky Duckies Again," Wall Street Journal, January 20, 2003.
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