On February 8, President Bush submitted a tax cut proposal to Congress that is
patterned after a $1.6 trillion ten-year tax reduction proposed by candidate Bush
during the 2000 presidential campaign. Other CTJ Analyses of Bush Plan Cost of Bush Plan 3/8/01 Revised Analysis of Bush Plan 2/27/01 Bush Plan and Working Families 1/15/00
Bush has claimed that under his plan, the "average" family would receive a tax cut of $1,600. However, this claim is misleading.
- Almost ninety percent of taxpayers would receive less than $1,600 in tax cuts if the Bush plan were fully implemented in 1999.
- Moreover, 27 percent of taxpayers would receive no tax cut at all under the Bush plan.
| Number of Taxpayers With Little or No Income Tax Cut Under George W. Bush’s Tax Plan (Numbers of taxpayers in thousands) | |||||||
| Income Group | Number of tax units |
Income Range | Average Income |
# with No Tax Cut |
% | # with Less Than $1,600 Tax Cut |
% |
| Lowest 20% | 25,323 | Less than $13,600 | $ 8,600 | 18,945 | 74.8% | 25,323 | 100.0% |
| Second 20% | 25,324 | $13,600–24,400 | 18,800 | 9,341 | 36.9% | 25,324 | 100.0% |
| Middle 20% | 25,325 | $24,400–39,300 | 31,100 | 3,267 | 12.9% | 24,906 | 98.3% |
| Fourth 20% | 25,326 | $39,300–64,900 | 50,700 | 663 | 2.6% | 23,160 | 91.4% |
| Next 15% | 18,994 | $64,900–130,000 | 86,800 | 641 | 3.4% | 11,591 | 61.0% |
| Next 4% | 5,065 | $130,000–319,000 | 183,000 | 559 | 11.0% | 2,689 | 53.1% |
| Top 1% | 1,264 | 915,000 | 144 | 11.4% | 358 | 28.3% | |
| ALL | 127,585 | $ 50,800 | 34,526 | 27.1% | 114,315 | 89.6% | |
| ADDENDUM | |||||||
| Bottom 60% | 75,972 | Less than $39,300 | $ 19,500 | 31,553 | 41.5% | 75,553 | 99.4% |
| Top 10% | 12,660 | $92,500 or more | 218,000 | 945 | 7.5% | 5,432 | 42.9% |
| Source: Institute on Taxation and Economic Policy Tax Model. Citizens for Tax Justice, August 2000, updated 2/7/2001 |
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The Bush plan would treat married couples more generously than other tax filers. The typical married couple filing jointly would receive an income tax cut of $1,028 under the Bush plan, when it is fully in place in 2006.
But the typical single taxpayer would get only $249 from the Bush plan. In contrast, counting all the elements of the Bush tax program, the best off one percent of all taxpayers would get an average annual tax cut of $46,000 (in 1999 dollars)-- almost 43 percent of the total tax cut.
| Bush Income Tax Cuts by Family Types $-billions except averages. Excludes effects of estate tax cuts and corporate tax breaks. |
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| Figures show the effects of the Bush income tax cuts fully phased in, at 1999 levels | ||||||||||
| Married couples filing jointly | All others (unmarried) | |||||||||
| Income Group | # of couples (000) | % of couples | Average Income | Bush tax cut | Average tax cut | # of taxpayers (000) | % of these taxpayers | Average Income | Bush tax cut | Average tax cut |
| Lowest 20% | 10,871 | 20% | $ 18,450 | $ 1.3 | $ 116 | 14,436 | 20% | $ 6,580 | $ 0.2 | $ 15 |
| |
10,868 | 20% | 36,600 | 7.5 | 694 | 14,433 | 20% | 13,200 | 1.7 | 118 |
| Middle 20% | 10,882 | 20% | 54,200 | 11.2 | 1,028 | 14,429 | 20% | 20,700 | 3.6 | 249 |
| Fourth 20% | 10,874 | 20% | 76,400 | 14.0 | 1,289 | 14,444 | 20% | 31,200 | 5.9 | 408 |
| Next 15% | 8,156 | 15% | 123,000 | 15.1 | 1,846 | 10,828 | 15% | 49,900 | 7.5 | 692 |
| Next 4% | 2,175 | 4% | 275,000 | 5.5 | 2,542 | 2,888 | 4% | 88,200 | 3.6 | 1,238 |
| Top 1% | 544 | 1% | 1,383,000 | 24.3 | 44,757 | 722 | 1% | 407,000 | 5.4 | 7,532 |
| Source: Institute on Taxation and Economic Policy Tax Model. Citizens for Tax Justice, Feb. 7, 2001 |
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The analysis cited above was performed using the Institute on Taxation and Economic Policy Tax Model, a widely respected tool for analyzing the revenue and distributional effects of tax proposals.
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