Bush’s tax cuts benefit — wait for it — the very wealthy

January 8, 2007

During a Face the Nation interview yesterday, House Speaker Nancy Pelosi suggested she has not ruled out repealing some of the White House’s tax cuts, particularly for the very wealthy. “It may be that [repealing] tax cuts for those making over a certain amount of money, $500,000 a year, might be more important to the American people than ignoring the educational and health needs of America’s children,” Pelosi said.

It’s a good call, especially when one considers just how good millionaires have had it lately thanks to Bush’s breathtaking generosity towards those at the very top.

Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.

The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.

Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.

It’s nice of the CBO to spell all of this out for us, and this certainly comes as a surprise to … absolutely no one. The results are as most would expect — households in the top 1% of earnings got a break of about $58,000, which is more than most middle-class households earn in a year.

That said, some of this is new. The CBO report includes tax receipts from 2004, which, as the NYT explained, is “the first year in which taxpayers could take full advantage of the cuts on stock dividends and capital gains.” In other words, the dynamic is getting worse as more of Bush’s policies are implemented.

In the broader sense, there are two angles to consider.

First, Bush insisted in an op-ed last week that his tax cuts are sacrosanct and that congressional Dems better not think about scaling them back. In other words, the existing structure that lavishes huge tax cuts on the very wealthy is exactly the way the president likes it, and he will fight to keep it this way. If Dems shy away from the debate, they’re missing an opportunity here.

And second, it’s probably worth remembering that Bush doesn’t seem to fully understand exactly what his tax cuts do, at least as far as the economy is concerned.

President Bush wrote in a Wall Street Journal op-ed Wednesday that “it is also a fact that our tax cuts have fueled robust economic growth and record revenues.” The claim about fueling record revenue is flat wrong, and it is shocking that the president should persist in making such errors. After all, tax cuts are the central plank of his domestic policy. How can he fail to understand the basic facts about them?

Because the facts — which have a well known liberal bias — are inconvenient and contradict the president’s impervious-to-reality worldview?

…his tax cuts are sacrosanct….

Since when? Did some elect/appoint George Walker Bush Pope?

  • Bush seems to have learned how to negotiate (or not to) from Yassir Arafat. Something I took away from Bill Clinton’s autobiography was his frustration with Arafat’s approach throughout the 1990s, which was on the order of, “agree to all my demands as a pre-condition of talking and I will concede next to nothing, then let’s discuss.” It’s the exact approach W is taking.

    As a side note, I was watching Sesame Street recently (with my young sons, thank you) and there was a segment where Bert was leading a meeting of the National W Lovers Association. It was just about the letter W and nothing more, yet I found that such is my aversion even to the letter W at this point that I had a hard time enjoying the otherwise fine sketch. If it had been any of the other 25 letters it would have been terrific children’s programming.

  • Pelosi and the Congressional Democrats would be smart to package the repeal of the tax cuts on the millionaire rich with reforming and easing the AMT (Alternative Minimum Tax) which now is hitting more and more of the middle class, not just the upper-upper middle class as in the past.

  • “it is also a fact that our tax cuts have fueled robust economic growth and record revenues.”

    This the same matra I heard from Jack Welch (former CEO of GE) during his interview on the Colbert Report. Problem is that most of the growth is in Jack’s tax bracket.

    What the ultra rich, Bush and their flunky mouthpieces in the MSM (I see you Crudlow) might be true if the US isn’t fighting a global war on many fronts.

    I can only shudder to think what WW2 would have been like if tax cuts were applied the same way. B-29s? Who needs them! M-1 Rifles? Springfields are more cost effective. Liberty Ships? We don’t need no stinking shipping if it raises my taxes. The Manhatten Project? Buncha eggheads talking about collapsing Urainiam? Not over my tax cuts…

  • Since there are record deficits to go along with those ”record revenues,” there must be something very, very, very wrong with the overhead.

  • It’s incredible what Australobushicus has gotten away with by just standing there like a missing link with his knuckles dragging the pavement and just saying, “I can and you can’t and you can’t question me and nothings going to change and that’s that”.

    And that is Bushshit. But just by standing his ground and not flinching, even when he’s ridiculous, he’s caused a national and worldwide disaster.

    He’s just a cardboard cutout and it’s time to turn him sideways and show the world that there’s absolutely nothing there. Take away his attitude and arrogance and the missing link would blow away.

    He’s not going to stop with the indignant bluster. It’s time to get past that sham.

  • ***It’s incredible what Australobushicus has gotten away with by just standing there like a missing link with his knuckles dragging the pavement and just saying, “I can and you can’t and you can’t question me and nothings going to change and that’s that”.***
    ————————————————————————-burro

    Australobushicus had better watch out for that saber-toothed liberal wolf—Canus Democraticus Carnivorus—that’s sneaking up behind him. It has a fiduciary nutrition chart on the benefits of dining on wealthy chimpanzees….

  • The Haves and Have Mores have done very well with this administration. I wonder if some of McCain’s contortions (aka flip flops) have something to do with convincing the ceos and other megawealthy that he is willing to do anything to gain and keep power. Doing it for the base doesn’t totally make sense since the base will vote Republican almost regardless of who is nominated. So he must convince the ultrarich that he is very willing to do their bidding.

  • What would really cause economic growth is taxing the wealthy, who squirrel away plenty of their taxable income through loopholes and offshoring, and using that cash to create a universal healthcare system. There would he higher employment in the healthcare sector, greater productivity due to a healthier workforce and having a very broad swath of the public with more cash in their pocket after paying reasonable healthcare premiums would lead to greater spending on products and services from companies owned by the wealthy and very wealthy.

    But instead Bush prefers making his base haves and have mores become the have mores and have way mores.

  • The claim about fueling record revenue is flat wrong, and it is shocking that the president should persist in making such errors. After all, tax cuts are the central plank of his domestic policy. How can he fail to understand the basic facts about them?

    The WaPo editorial writers really need to be called to account for this crapola. The president isn’t “persisting in making errors” – he’s flat out fabricating lies and falsehoods to advance an Administration policy goal – exactly as he and his toadies did in 2002-03 that got us into an odious war. The editorial writers treated him with defference and with kid gloves then and now, years later, when they really should know better, they’re still doing it. Shame on them.

  • I wrote about this one last night on my blog, for anyone interested. While it’s true that this is not “news” in that it doesn’t tell anyone who’s been paying attention anything s/he didn’t know before, it is pretty important for framing and contextualizing the big political fights to come that involve taxing, spending, and the budget generally.

    The notion of “preserving tax cuts versus increasing spending” has a very different feel to it than “preserving tax cuts for the wealthiest versus increasing spending for everyone else.”

  • Puh-lease. Blah, blah, blah, blah.

    Does this really interest anyone when there are far more pressing issues to consider, such as:

    1) Flag burning
    2) Fetal pain
    3) Gay marriage
    4) Terry Schiavo

    Once these issues get resolved (and don’t think for a second that the Terry Schiavo issue is resolved just because she’s dead; there is legislation currently being drafted that will officially save her), we can focus on the really important issue:

    Prayer in school.

    So please stop trying to distract us from the real issues facing America.

    PS – it’s amazing the crap I can come up with once I switch my brain to “off”.

  • Well, I think as a bleeding heart, I really have to be worried about any population that is only 1%. That sounds, like, endangered or something. Why should I worry about whether some bug or non-motile organism is gonna kick the bucket, population-style, when right here at home we might lose millionaires to ninehundredthousandaireism? That is just not right. I’m willing to make some sacrifices to make sure that does not happen here. I mean, what would the terrorists think about our morals is we leave behind this powerless ultraminority? Who would Jesus give tax breaks to?

    With respect to Homer, I would put this at 1b) to Flag burning.

  • Package it as one of the “sacrifices” the Bushbot has asked us to make for his war. He can’t object if some of the taxes go to pay for his attempt to rob the cradle of civilization.

    Or, just let the rich swine whine. Thanks to Shrubmeister, the $500,000 and up bracket is seriously outnumbered and it is really hard to sell or defend “More for the have mores,” to the have lesses and have nots.

  • As an aside, CJ mentions “bleeding heart” @14 – I was watching “Good Night and Good Luck” last night (I know, I’m a little late to the party) and my ears perked up when I heard McCarthy (in actual video tape) mention all the “bleeding hearts” that might have some problems with what he’s doing but that essentially, the ends justify the means.

    For all the critics of bleeding heart liberals, I guess they have a wonderful role model for one of the early (?) if not more notable users of that phrase.

  • NYT says, “Put another way: rich families were the undisputed winners from President Bush’s tax cuts, but people in the bottom half of the earnings scale were not paying much in taxes anyway.”

    As long as we pretend social security isn’t a tax, anyhow.

  • How can we cut taxes when the nation is at war? The burden of Bush’s Global War on Terrorism should not be passed on to our children and grandchildren. Congress must do the right thing and raise taxes to pay for this war or cut spending.

    • Comments are closed.