Millionaires got the most from Bush tax cuts

Donald Trump, Jr. and Vanessa Trump, originally uploaded by Lindsay Beyerstein.

From the department of readily predictable, but important research.... A new study by the non-partisan Congressional Budget Office confirms that families earning over $1 million a year saw their taxes drop faster than any other group in 2004, while taxes rose slightly for middle-income families. Families earning over a million dollars per saved an average of $58,000 from the tax cuts. It's pretty stunning to think that the 2004 tax cuts saved Mr. and Mrs. Millionaire more money than most people earned that year. [NYT]

Comments

[Count Zero]

But they invest more!
They create more jobs!
Trickle down economics works!

*laugh*

Like Viet Nam and Iraq, Republicans haven't learned from their past mistakes, i.e. the Reagan era.

[norbizness]

According to Worthington's Law, a radical theory first proposed on Mr. Show, "More money = better than." This is a failsafe way to gauge human worth.

[misterniceguy1960]

Least surprising headline of the year.

And I say that even knowing that by December we'll be seeing a headline reading "Democrats Blamed for Fall of Baghdad".

[Soullite]

Count Zero, sure they've learned. They've learned what complete morons the American public is and how easily they can be conned. You don't really think they believe any of that crap do you?

[The Phantom]

You know...I question all these numbers. Those "rich" (ha ha) that make $100,000-$150,000 may have lower Federal Tax rates...but the Alternative Minimum Tax takes away any and all savings that come from those supposedly lower rates.

I'm sure that the super-rich have schemes that normal people can't even think of, but for many of the "rich", the Bush income tax cuts never happened

[michael schmidt]

Phantom, you might be interested in reading the post, which is talking about people who earn more than a million a year--10 times the salary range you are talking about.

What does it mean to say "I question all those numbers?" Does it mean you have better numbers, or that you just like throwing everything into doubt so that you can make whatever assertions you want without being constrained by any quantitative facts?

[John Lucid]

The Donald, Jr. sure is a handsome fellow.

I bet his daddy needs that tax cut to pay for lawyers to sue Rosie O'Donnell.

[The Phantom]

No, Mikey, I did read the post.

If you read my comment, I might even be supporting the proposition that the alleged "tax cuts" are skewed to the ultra-rich since. I know few if any who have benefitted by them. The rates went down, but that doesn't mean anything, if you're subject to the AMT, which everyone still is.

I don't have a better set of numbers. I'll say that those who make $100,000 - $200,000 supposedly received tax cuts-- but I see no evidence that they got any cut in what they actually pay to the Federal Government.

If the Dems want to score some points with the middle class, they should do something about the AMT. Especially in high wage-but-high living expenses states like NY, the AMT makes a mockery of all the supposed tax cuts that people like to talk about.

[aeroman]

Phantom, the article states:

But the Congressional study offers additional insight because it incorporates information about what people paid in 2004, the first year in which taxpayers could take full advantage of the cuts on stock dividends and capital gains.

The data based on actual payment would account for any effects of the AMT. Your statement also makes me question the depth of your knowledge as to how the AMT works. Care to elaborate on your position?

[Lindsay Beyerstein]

Blame the erstwhile Republican-controlled Congress for keeping the Alternative Minimum Tax alive and allowing it to hit 15 million new households in 2006.

The Bush tax cut really screws upper middle class families who seem to do okay on paper from the BTC. Unfortunately, the AMT law is written so that if your AMT would be greater than your taxes under the BTC, you pay the AMT amount.

So, the so-called tax cut is a sham for a lot of two-income families in blue states. Surprise, surprise.

[aeroman]

Also, everyone is "subject to" the AMT in the sense that they would be subject to it if their income were high enough and their calculated rate with benefits were low enough. So, yes, everyone is subject to the AMT if it applies to them. It doesn't apply to most earners, though.

I agree that the Democrats should embrace AMT reform, especially re: the expanse of its applicability over recent years and the projected future. The Republicans had six years to do so, but instead chose to focus on naked wealthy-person-pork like the estate tax and rates on investment income. I expect that the Democrats will focus on reform or even replacement in the near future. And I bet you won't like what they propose.

[aeroman]

Also, Lindsay, using Canadian witch-magicks, psychically stole those points from me as I typed.

[B-Money]

"It's pretty stunning to think that the 2004 tax cuts saved Mr. and Mrs. Millionaire more money than most people earned that year."

Yes this is true, but consider that a person making $1 million a year who pays even a measly 20% in taxes, like most of us middle class folks, still pays $200K.

While I don't like the fact that the rich and famous always seem to get the breaks and comps they don't need, they do pay a large sum in taxes just based on their income and the percentage that applies to taxes. Let s not forget that FICA is non-refundable and does not figure in the tax breaks. That is a static number. I know I pay a lot in f'n FICA! And I will never see a dime back because it will be bankrupt when I need it! And they want to start giving SS benefits to illegals! Fuck that shit!

[The Phantom]

Bush and the red-state Republicans certainly did nothing to take care of blue-state middle class taxpayers, but neither Northeast Democratic Congresspeople. They largely stonewalled against any and all tax cuts. Had they not been so negative towards rate cuts, they could have had a voice in its final form.

I do not recall hearing Charlie Rangel or Chuck Schumer or Hillary Clinton speaking out forcefully on this issue of AMT at all.

And anyone from NYC is very heavily whacked by State and Local income taxes, and it's not the "Rethugs" on a national or local level who did that to them year upon year.

But the issue of Federal AMT Reform had better be something that Northeast Dems and Republicans can agree on. For most "upper income" people, the Bush tax cuts never happened.

[brent]

Somerby in his incomparable way, made a number of important points on this yesterday:

here

[brent]

While I don't like the fact that the rich and famous always seem to get the breaks and comps they don't need, they do pay a large sum in taxes just based on their income and the percentage that applies to taxes.

How else should it work? Should people who make less money and share far less in the country's wealth share more of the burden for the infrastructure that creates that wealth? What do you imagine would be more fair?

That is a static number. I know I pay a lot in f'n FICA! And I will never see a dime back because it will be bankrupt when I need it!

This is, of course, bullshit. Even a cursory amount of research on this issue will clarify that for you.

[Nathanael Nerode]

"Earning" is the wrong word. "Receiving" over a million dollars a year is the correct phrase. Nobody actually earns that much.

And those people aren't just millionaires. To receive income of over a million dollars a year usually means that you're at least a ten-or-twenty-millionaire.

[The Phantom]

--"Earning" is the wrong word. "Receiving" over a million dollars a year is the correct phrase. Nobody actually earns that much.--

Oh, that's just socialist bullshit. Lots of people earn that, and more by inventing great things, running great companies, etc usually at the expense of 80 hour workweeks etc

Then you have corporate deadwood who risk nothing and get paid megabucks anyway, but thats another story.

[Uncle Kvetch]

Well, Trump's spawn will "earn" a very large pile of cash when their daddy shuffles off this mortal coil. And if the Republicans had their way, they wouldn't have to pay a dime in taxes on it. But I'm sure that's the Democrats' fault somehow, I just can't figure out how at the moment...it'll come to me...

[The Phantom]

UK

I do not support repeal of the estate tax, if that is what you're speaking of.

You -can- make a case for repealing or lowering taxes on investment income.

But there's simply no case to be made for removing the estate tax--such an action would freeze class distinctions for all time.

[Gaijin Biker]

The purpose of taxes is not to erase class distinctions.

[John]

Ugh. Can you please make those ugly mugs optional? They're making hard to visit your blog. TIA.

[Wayne]

Let's see. I just read that we don't have enough money budgeted to provide adequate armored vehicles to our people fighting in Iraq-- there was some $140M or somesuch contract that would buy...not enough.

But the CEO dumped at Home Depot (wasn't it Home Depot?) got a termination (that's the polite phrase) package of what, $220M?

Let's here it for having priorities in order.

[Nathanael Nerode]

"Lots of people earn that,"

Let's see. 80 hrs/wk, 52 wks/yr = 4160 hrs/yr.
1,000,000/4160 = $240/hr

OK, maybe $240/hr is a reasonable wage for some people's highly skilled labor. Although I doubt that there are very *many* people who deserve that level of wage *and* work that much, I'll admit there are probably some.

So I'll back off: no individual actually "earns" *five million* dollars a year, which would be a wage of $1200/hr, 80 hrs/wk, 52 wks/yr. Agreed, "Phantom"? This is not "socialist crap", this is simple arithmetic.

[Nathanael Nerode]

And just as a contrast, obviously someone working 12 hours a day, 7 days a week, with 2 weeks vacation per year, and getting wages for a very highly skilled worker of $200/hr -- which is what I'd expect for someone who really does really valuable work -- would *earn* 84 * 50 * 200 = $840,000/yr. I think I am correct to say that a million dollars a year is almost never in the "earned" category.

Not that there's anything wrong with unearned income. I have plenty of it, and most people have at least a little (checking account interest, gifts, inheritances). It's just dishonest to call it "earnings".