Our guest blogger is Michael Linden, Director of Tax and Budget Policy at the Center for American Progress Action Fund.
Recently, former Minnesota governor Tim Pawlenty (R) proposed a set of huge new tax cuts that would cost more than three times as much as the Bush tax cuts. His plan to reduce the top individual income tax to the lowest rate in post-war history, cut the corporate tax rate by more than half, and completely abolish taxes on capital gains, dividends, and massive estates would mainly benefit the extremely wealthy. In fact, these tax changes would be even more skewed towards the rich than the Bush tax cuts were.
Using analysis from the Tax Policy Center, we put together the accompanying chart showing just how tilted the Pawlenty tax cuts would be. Nearly 40 percent of the entire benefit of Pawlenty’s plan would go to the richest 1 percent of Americans. The next richest 9 percent would enjoy 25 percent of the total benefit. In other words, under the Pawlenty plan, the richest 10 percent of Americans would reap significantly more than the bottom 90 percent combined:
This distribution is even more slanted toward the very top and away from the middle than the Bush tax cuts were. While the Bush tax cuts delivered 27 percent of their total value to the richest 1 percent, Pawlenty’s plan would give them about 40 percent. The middle 60 percent of Americans got about one-third of the total value of the Bush tax cuts, and would get less than one-fourth of the value of Pawlenty’s.
The Bush tax cuts were an utter failure at promoting economic growth, job creation, or shared prosperity. They succeeded only in turning a budget surplus into a huge deficit. You might think that after such a colossal failure, conservatives would be forced to admit that tax cuts for the rich aren’t a magic economic elixir. Perhaps they’d even start coming up with some new ideas for boosting the economy. But if Pawlenty’s plan is any indication, conservatives seem intent on repeating the mistakes of the past – only bigger.