jamesglewisf
10-04-2000, 06:35 AM
The ABC News (http://abcnews.go.com/sections/politics/DailyNews/debate001003_truthsquad.html) had something interesting to say about tax cuts:
Issue: Tax Cuts
What Gore Said: “Almost half of all the tax cut benefits … under Governor Bush’s plan, go to the wealthiest 1 percent.”
Fact: Bush’s tax relief proposal would reduce tax rates across all levels of income. Because people in higher income brackets pay more in taxes, they would receive the bulk of the savings. By the Bush campaign’s own calculations, 44 percent of the reductions would go to those earning more than $300,000 — the top 1 percent of earners.
Pay close attention to the fact. ABC News says that Bush is proposing to cut taxes across all levels of income, but since people in higher income brackets pay more in taxes, they would receive the bulk of the savings.
Let's look at an example, and this has nothing to do with actual tax rates, by the way.
If I lower the tax rate for a person making 300,000 by an actual 5%, he will save 15,000. If I lower the tax rate for a person making 40,000 by an actual 25%, he will still save only 10,000. Who got the bigger tax cut?
How about simple example with real tax rates?
I used the Quicken Turbotax Tax Estimator (http://www.quicken.com/taxes/estimator/). Both income levels were for married filing jointly with one dependent and no itemized deductions. The person paid $40,000 pays $3,638 in taxes (about 9.10%). The person paid $300,000 pays $88,092 in taxes (about 29.36%). If you lowered them both by an actual 9.10%, the person at $40K pays no taxes while the person at 300K still pays $60,792 in taxes. So, who got the bigger tax break? Of course the 300K family did, but the 40K family is paying no taxes at all.
BTW, change the $40,000 income to $75,000 and what do you get? $10,800 in taxes (about 14.4%). Drop both tax rates by an actual 14.4%, and 75K family pays nothing in taxes while 300K family still pays $44,892 in taxes.
Issue: Tax Cuts
What Gore Said: “Almost half of all the tax cut benefits … under Governor Bush’s plan, go to the wealthiest 1 percent.”
Fact: Bush’s tax relief proposal would reduce tax rates across all levels of income. Because people in higher income brackets pay more in taxes, they would receive the bulk of the savings. By the Bush campaign’s own calculations, 44 percent of the reductions would go to those earning more than $300,000 — the top 1 percent of earners.
Pay close attention to the fact. ABC News says that Bush is proposing to cut taxes across all levels of income, but since people in higher income brackets pay more in taxes, they would receive the bulk of the savings.
Let's look at an example, and this has nothing to do with actual tax rates, by the way.
If I lower the tax rate for a person making 300,000 by an actual 5%, he will save 15,000. If I lower the tax rate for a person making 40,000 by an actual 25%, he will still save only 10,000. Who got the bigger tax cut?
How about simple example with real tax rates?
I used the Quicken Turbotax Tax Estimator (http://www.quicken.com/taxes/estimator/). Both income levels were for married filing jointly with one dependent and no itemized deductions. The person paid $40,000 pays $3,638 in taxes (about 9.10%). The person paid $300,000 pays $88,092 in taxes (about 29.36%). If you lowered them both by an actual 9.10%, the person at $40K pays no taxes while the person at 300K still pays $60,792 in taxes. So, who got the bigger tax break? Of course the 300K family did, but the 40K family is paying no taxes at all.
BTW, change the $40,000 income to $75,000 and what do you get? $10,800 in taxes (about 14.4%). Drop both tax rates by an actual 14.4%, and 75K family pays nothing in taxes while 300K family still pays $44,892 in taxes.