Because George Bush was a flaming socialist. The left hated him as they did not because of the Iraq war but because he out-performed them as a liberal. And if Obama lets the Bush tax cuts expire, the poorest Americans will lose their subsidies and their taxes will go up 50%, and Obama will become a conservative and all will be well with the world!
In 2000, the top 60 percent of taxpayers paid 100 percent of all income taxes.
The bottom 40 percent collectively paid no income taxes.
Lawmakers writing the 2001 tax cuts faced quite a challenge in giving the bulk of the income tax savings to a population that was already paying no income taxes.
Rather than exclude these Americans, lawmakers used the tax code to subsidize them. (Some economists would say this made that group's collective tax burden negative.)
First, lawmakers lowered the initial tax brackets from 15 percent to 10 percent and then expanded the refundable child tax credit, which, along with the refundable earned income tax credit (EITC), reduced the typical low-income tax burden to well below zero.
As a result, the US Treasury now mails tax "refunds" to a large proportion of these Americans that exceed the amounts of tax that they actually paid.
All in all, the number of tax filers with zero or negative income tax liability rose from 30 million to 40 million, or about 30 percent of all tax filers.
The remaining 70 percent of tax filers received lower income tax rates, lower investment taxes, and lower estate taxes from the 2001 legislation.
Consequently, from 2000 to 2004, the share of all individual income taxes paid by the bottom 40 percent dropped from zero percent to minus 4 percent, meaning that the average family in those quintiles received a subsidy from the IRS.
By contrast, the share paid by the top quintile of households (by income) increased from 81 percent to 85 percent.
Expanding the data to include all federal taxes, the share paid by the top quintile edged up from 66.6 percent in 2000 to 67.1 percent in 2004, while the bottom 40 percent's share dipped from 5.9 percent to 5.4 percent.
Clearly, the tax cuts have led to the rich shouldering more of the income tax burden and the poor shouldering less.
Read the rest from Brian Riedl, here.
Read the rest from Brian Riedl, here.
