When conservative radio star Rush Limbaugh roots for President Barack Obama’s failure, he may be motivated by something other than ideology.
A new analysis by the Center for American Progress Action Fund finds that the current Bush tax system saves Rush Limbaugh over $1.5 million every year.
The current Bush tax system, enacted in 2001 and 2003, showered tax breaks on the very wealthiest Americans and ushered in a decade of tepid job growth and declining real incomes for average American households.
President Barack Obama’s budget would restore some fairness to the tax system by returning the tax rates for the richest 2% to what they were in the 1990s, reversing Bush’s giveaways to the investor class, and cutting taxes for 95% of working American families.
Limbaugh is paid approximately $38 million every year — more than 99.9 percent of American taxpayers. By cutting the rates for the top two income brackets Bush effectively saved Rush $1.5 million a year.
Of course, as a man of means, Limbaugh almost certainly saved much more than this through tax savings on income from his investments (the details of which are not publicly available) when Bush also lowered the top tax rate on capital gains and dividends to historically low levels.
If Obama returns the rates for the top two tax brackets to what they were in the year 2000 in order to cut taxes for American families and invest in health care, energy and education, Rush’s huge savings would be reversed.
No wonder he wants President Obama to fail.
Methodology and notes after the jump.
President Bush lowered the top two marginal income tax brackets on the richest 2 percent of Americans and lowered the tax rate on capital gains and dividends which overwhelmingly benefits Americans making over $600,000 per year.
Taxable income after deductions and exemptions is approximately 88 percent of adjusted gross income for taxpayers making over $10 million per year, according to IRS data. Assuming Mr. Limbaugh is typical of his class in his deductions and exemptions, his taxable income from his known income would be $33.4 million. Applying the 2009 tax rates and the 2000 tax rates to an income of $33.4 million yields a difference of $1.5 million.
This estimate is conservative, as we only considered Rush’s wage and salary income, and didn’t take into account Rush’s savings from Bush’s lower capital gains rate. Over 98 percent of taxpayers making over $10 million a year have capital gains income, and the average income from capital gains for people at that income level is $15 million/year. Because we don’t have access to Rush’s tax returns, we don’t know how much Bush’s giveaways to the investor class are saving him, but it’s undoubtedly a lot.