Reports: Bush tax cuts help rich
Congressional Budget Office says tax burden fell for those making $1M, increased for lower levels.August 13, 2004: 7:22 AM EDT
NEW YORK (Reuters) - President George W. Bush's tax cuts have transferred the federal tax burden from the richest Americans to middle-class families, with one-third of the cuts benefiting people with the top 1 percent of income, according to a government report cited in newspapers Friday.
The Congressional Budget Office report, to be released Friday, is likely to fuel the debate over the cuts between Bush and his Democratic challenger in November, Sen. John Kerry.
The report said the top 1 percent, with incomes averaging $1.2 million per year, will receive an average $78,460 tax cut this year, and have seen their share of the total tax burden fall roughly 2 percentage points to 20.1 percent, according to The New York Times.
In contrast, households in the middle 20 percent, with incomes averaging $57,000 per year, will receive an average cut of only $1,090, the newspaper said, citing the CBO report.
Taxpayers whose incomes range from $51,500 to about $75,600 saw their share of federal tax payments increase, according to CBO figures cited by The Washington Post.
The calculations, requested by congressional Democrats, confirm the long-held view by independent tax analysts that the tax cuts, enacted in 2001 and 2003, have heavily favored the wealthiest taxpayers, the Times said.
Bush has said the cuts provided crucial support to the U.S. economy after the Sept. 11 attacks and the three-year decline in U.S. stocks.
But Kerry, who wants to roll back the cuts for households whose incomes top $200,000 per year, has said the cuts did little for the economy and helped cause the federal budget to swing from a more than $100 billion surplus in 2001 to a projected deficit exceeding $400 billion this year.
The newspapers, citing the CBO report, said about two-thirds of the benefits from the cuts went to households in the top 20 percent, with an average income of $203,740.
People in the lowest 20 percent of earnings, which averaged $16,620, saw their effective tax rate fall to 5.2 from 6.7 percent, though their average tax cut was only $250.
Copyright 2004 Reuters
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.