"In 2010, Bush Tax Cuts Will Give Millionaires More In Tax Breaks Than 90% Of Americans Will Earn In Income"
As Ben Furnas pointed out last month in a report highlighting the extreme inequity present in America’s tax system, “America’s wealthiest celebrities save millions every year because of Bush’s lower tax rates for the very richest Americans.” In a speech yesterday, President Barack Obama once again laid out how he plans to address this problem:
We’re also doing away with the unnecessary giveaways that have thrown our tax code out of balance. We need to stop giving tax breaks to corporations that stash profits or ship jobs overseas so that we can invest in job creation at home. And we need to end the tax breaks for the wealthiest 2% of Americans, so that folks like me are paying the same rates that the wealthiest 2% of Americans paid when Bill Clinton was President.
In the budget that he has proposed, Obama would raise rates on the top two tax brackets to 36 and 39 percent, from 33 and 35, respectively. Reinforcing the wisdom of this plan, the Center on Budget and Policy Priorities points us to this gem regarding the Bush tax cuts:
In 2010, when the 2001-2008 tax cuts all are fully in effect, households with annual incomes of more than $1 million a year will receive tax cuts averaging $168,000, boosting their after-tax incomes by an average of 7.7 percent
Brad Johnson noted in today’s Progress Report that “the Bush tax cuts for the wealthy are greater than the entire salary of most Americans.” Indeed, according to data compiled by the Tax Policy Center, 90 percent of households have incomes of less than $135,000 a year.
Justin Fox at The Curious Capitalist put together this chart — using the top 400 earners in America — to illustrate why higher tax rates on the richest American’s make sense, noting that “the top 400′s share of the nation’s income went from 0.52% in 1992 to 1.31% in 2006 — an even bigger increase than its share of taxes paid“:
So the rich have been collecting more and more of the nation’s income, while simultaneously having their taxes cut. The Obama budget is designed to restore at least a little bit of fairness to this lopsided system.