1311 L Street, NW
Washington, DC
Contact: Bob McIntyre,
202/626-3780
|
Citizens for Tax Justice 1311 L Street, NW Washington, DC |
Monday, July 12, 1999 Contact: Bob McIntyre, 202/626-3780 |
Click here to see this analysis in PDF format.
Three key elements of the House Republican tax plan being discussed by Ways and Means
Chairman Bill Archer (R-Tex.) would give three-quarters of their benefits to the best-off ten percent
of all taxpayers. The items include a sharp reduction in income taxes on capital gains, elimination of According to an analysis of the three proposals released by
Citizens for Tax Justice, the best-off tenth of all taxpayers,
with average income of $204,000, would enjoy: In contrast, the bottom three-fifths of all taxpayers would
get only 6.5 percent of the overall tax cuts. Almost half the total tax benefits from the three tax cuts
would go to the richest one percent of all taxpayers, those
with incomes exceeding $301,000. To mask the huge cost of the tax reductions, Chairman Archer apparently intends to phase them
in slowly, except for the capital gains tax cut which would be effective retroactively to July 1 of this
year. When fully phased in, the cost of these three provisions would exceed $250 billion a year (at
2009 levels, including the added interest payments that the tax cuts would require). "House Republicans apparently have no doubts about who they think should get tax cuts," said
CTJ director Robert S. McIntyre. "And if it means bankrupting the government to make the rich even
richer, well, they don't seem to mind." The tax cut plans being marked up this week in the House and Senate are widely considered to
be political statements by congressional Republicans, rather than attempts at serious legislation.
President Clinton has vowed to veto anything like what the tax-writing committees are considering.
the federal estate tax on the largest estates and a 10 percent cut in personal income tax rates.
Archer has promised that the first two items will be in his bill;
the third reportedly remains under consideration.
10% Income Tax Rate Cut
Capital Gains Tax Cut
Estate Tax Elimination
All Three Tax Proposals
Income Group
Income Range
Avg. Income
Tax Cut $-bill.
Avg. Tax Cut
% of Total Tax Cut
Tax Cut $-bill.
Avg. Tax Cut
% of Total Tax Cut
Tax Cut $-bill.
Avg. Tax Cut
% of Total Tax Cut
Tax Cut $-bill.
Avg. Tax Cut
% of Total Tax Cut
Lowest 20%
Less than $13,300
$ 8,400
$ –0.3
$ –11
0.4%
$ –0.0
$ –0
0.0%
$ –0.0
$ –0
0.0%
$ –0.3
$ –11
0.2%
Second 20%
$13,300– 23,800
18,300
–2.0
–79
2.6%
–0.0
–1
0.2%
–0.0
–0
0.0%
–2.0
–80
1.7%
Middle 20%
23,800– 38,200
30,300
–5.2
–207
6.9%
–0.1
–4
0.7%
–0.0
–0
0.0%
–5.3
–211
4.5%
Fourth 20%
38,200– 62,800
49,100
–12.0
–474
15.9%
–0.4
–17
2.8%
–0.0
–0
0.0%
–12.5
–491
10.5%
Next 15%
62,800– 124,000
83,600
–20.1
–1,055
26.5%
–1.7
–89
11.0%
–0.0
–0
0.0%
–21.7
–1,144
18.3%
Next 4%
124,000– 301,000
173,000
–14.1
–2,775
18.6%
–2.6
–507
16.7%
–2.5
–489
9.0%
–19.1
–3,770
16.1%
Top 1%
301,000 or more
837,000
–22.1
–17,461
29.2%
–10.5
–8,319
68.5%
–25.2
–19,914
91.0%
–57.8
–45,693
48.7%
ALL
$ 48,700
$ –75.7
$ –593
100.0%
$ –15.4
$ –120
100.0%
$ –27.7
$ –217
100.0%
$ –118.7
$ –930
100.0%
ADDENDUM
Bottom 60%
Less than $38,200
$ 19,000
$ –7.5
$ –99
9.9%
$ –0.1
$ –2
1.0%
$ –0.0
$ –0
0.0%
$ –7.7
$ –101
6.5%
Top 10%
$89,000 or more
204,000
–45.1
–3,563
59.6%
–13.9
–1,099
90.7%
–27.7
–2,183
100.0%
–86.7
–6,846
73.0%
Notes: Figures show the annual effects of (1) the 10% cut in personal income tax rates; (2) the proposed reduction in the top income tax rates on realized capital gains, from 20% to 15% (for those in all but the bottom regular tax bracket) and from 10% to 7.5% (for those in the bottom regular tax bracket); and (3) elimination of the estate tax. All figures are at 1999 levels, showing full year effects after phase-ins are completed.
Source: Institute on Taxation and Economic Policy Tax Model.
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