Citizens for Tax Justice , 202-626-3780 February 8, 2001
Bush Tax Plan Benefits are Similar to Campaign Proposal: Skewed Toward Wealthy

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Other CTJ Analyses of Bush Plan
Cost of Bush Plan3/8/01
Revised Analysis of Bush Plan2/27/01
Bush Plan and Working Families1/15/00
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.

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 $319,000 or more 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

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.
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
Second 20% 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

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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