May 26, 2003
Hoping for a little tax relief this year? Then don't wait on the new tax cuts – there's not a whole lot in them coming to the vast majority of the population.
President Bush said, "This bill I'm going to sign is good for American workers; it is good for American families; it is good for American investors, and it's good for American entrepreneurs and small-business owners."
The president is certainly half right: the bill is good for American investors who get reductions in dividend and capital gains taxes. And this bill is good for businesses which will be estimated to get back 60 billion dollars over the next two years by a change in the depreciation rules.
But it's not good for most American families. Half the tax cut goes to only the top five% of taxpayers. The other 95% of all taxpayers share out the other half of this tax cut, but not very equally.
For those earning up to $20,000 per year, the tax cut will average only $53 this year. However, those who make ten times that amount, $200,000 per year, will get a tax cut averaging more than $2,500, almost 50 times as much. And those who make half a million will get back more than $5,000. In other words, Congress was 100 times more generous to someone making half a million dollars than to someone making $20,000.
What's worse is that those provisions which favor working people – like the child tax credit – will expire after two years – just after the next election. Those provisions which favor the wealthy either don't expire at all or go for four years.
The final name on the bill they are now signing should be the "2003 Tax Cut Bill of the Rich, by the Rich, for the Rich."