This was my response to some a liberal I bumped into recently online who insisted ad nauseam that George W. Bush (and therefore Mitt Romney) only cut taxes on the rich at the expense of the middle class. Posting virtually unedited. Later I think I’ll take some time and go into more detail.
Bush tax cuts as viewed from the married-joint perspective showing – rate (base income)
Test case – Married joint filer with an AGI of $50,000 (middle class):
Tax liability before Bush tax cuts = $8,299.50
Tax liability AFTER Bush tax cuts = $6,646.40
Net savings to this middle class family = $1,653.10 annually, or $137.75 per month.
Based on my example, it is CLEAR that the George W. Bush cut taxes not only on the “rich”, but also on the middle class. In fact, the lowest bracket rate dropped by 33%, so the repeated argument that Republicans keep cutting taxes on the “Rich only” is ridiculous.
Evaluating the share paid by the “rich” in taxes from 1986 (the earliest year for which I have data) to 2008 (the last year of the Bush administration), we see that Reagan/Bush policies caused the wealthiest Americans to pay higher and higher portions of the total tax burden, in spite of lower rates shared by the wealthy, the middle class and by poor.
Top 1% income tax share:
1986 – 25.75% (earliest year this data covers)
2000 – 37.42% (peak of the dot-com bubble)
2003 – 34.27% (Bush tax cuts go into effect)
2007 – 40.42% (peak of the Bush economy)
2008 – 36.73% (last year of the Bush administration)
In 2008, the last year of the Bush administration, the top 10% of income earners paid 69.94% of all taxes compared to 66.45% in the last year of the Clinton administration. Note: the INCREASE in the percentage of all taxes paid by the top 10% of income earners in this country between 2000 and 2008 (the Bush years) was greater than the total percentage of all taxes paid by the bottom 50% combined! The change in taxes paid by the top 10% was 3.49%, while the bottom 50% of income earners in 2008 only paid 2.59% of all taxes. Also interesting to note that the 2.59% paid by the bottom 50% of income earners in 2008 was almost HALF of the 4.6% they contributed in the last year of the Clinton administration.
Conclusion: the Bush tax policies not only cut taxes for the middle class, but also managed to increase the amount of all taxes contributed by the rich. This further illustrates the lunacy of the argument that Bush’s tax policies (and by extension those anticipated of Mitt Romney) favor the rich.