Sweeter still!
The jig is up. Not to worry.......I will make sure you have a place on one of the planes taking you all to the Aussie Outback. Just remember.........we are only leasing the Outback from the Aussies......you guys act up like you have here and its katie bar the door. You will be evicted faster than you can whistle Dixie........and then you will have no place to go. So behave yourselves.........take up wood carving....stay out of politics.
Rich gain most from last tax cut, study says
Investment tax reduction a greater boon for wealthy than previous Bush measures
David Cay Johnston, New York Times
Wednesday, April 5, 2006
The first data to document the effect of President Bush's tax cuts for investment income show that they have significantly lowered the tax burden on the richest Americans, reducing taxes on incomes of more than $10 million by $500,000 on average.
An analysis of Internal Revenue Service data by the New York Times found that the benefit of the lower taxes on investments was far more concentrated on the very wealthiest Americans than the benefits of Bush's two previous tax cuts, on wages and other noninvestment income.
When Congress cut investment taxes three years ago, it was clear that the highest-income Americans would gain the most, because they had the most money in investments. But the size of the cuts and what share went to each income group have not been known.
As Congress debates whether to make the Bush tax cuts permanent, the Times analyzed IRS figures for 2003, the latest year available and the first that reflected the tax cuts for income from dividends and from the sale of stock and other assets, known as capital gains.
The analysis found:
Among taxpayers with incomes greater than $10 million, the amount by which their investment tax bill was reduced averaged about $500,000 in 2003, and total tax savings, which included the two Bush tax cuts on compensation, nearly doubled to slightly more than $1 million.
These taxpayers, whose average income was $26 million, paid about the same share of their income in income taxes as those making $200,000 to $500,000 because of the lowered rates on investment income.
Americans with annual incomes of $1 million or more, about one-tenth of 1 percent of all taxpayers, reaped 43 percent of all the savings on investment taxes in 2003. The savings for these taxpayers averaged about $41,400 each. By comparison, these same Americans received less than 10 percent of the savings from the other Bush tax cuts, which applied primarily to wages, though that share is expected to grow in coming years.
The savings from the investment tax cuts are expected to be larger in subsequent years because of gains in the stock market.
The Times showed the new numbers to people on various sides of the debate over tax cuts. Stephen Entin, president of the Institute for Research on the Economics of Taxation, a Washington organization, and other supporters of the cuts said they did not go far enough because the more money the wealthiest had to invest, the more would go to investments that produce jobs. For investment income, Entin said, "the proper tax rate would be zero."
Opponents say the cuts are too generous to those who already have plenty. Rep. Charles Rangel of New York, the senior Democrat on the House Ways and Means Committee, said after seeing the new figures that "these tax cuts are beyond irresponsible" when "we're in a war, we haven't fixed Social Security or Medicare, we've got record deficits."
Because of the tax cuts, even the merely rich, making hundreds of thousands of dollars a year, are falling behind the very wealthiest, particularly because another levy, the alternative minimum tax, now costs many of them thousands and even tens of thousands of dollars a year in lost deductions.
The tax cut analysis was based on estimates from a computer model developed by Citizens for Tax Justice, which asserts that the tax system unfairly favors the rich. The group's estimates are considered reliable by advocates on differing sides of the tax debate. The Times asked the group to use the model to produce additional data on the effect of the investment tax cuts on various income groups. The analyses show that more than 70 percent of the tax savings on investment income went to the top 2 percent, about 2.6 million taxpayers.
By contrast, few taxpayers with modest incomes benefited because most of them who own stocks held them in retirement accounts, which are not eligible for the investment income tax cuts. Money in these accounts is not taxed until withdrawal, when the higher rates on wages apply.
Those making less than $50,000 saved an average of $10 more because of the investment tax cuts, for a total of $435 in total income tax cuts, according to the computer model.
sfgate.com |
