Is It Really Belt Tightening

[Ice]

You are aware that the Bush tax cuts shifted even more of the tax burden away from the poor and onto the wealthy and actually created direct subsidies for the poorest Americans, correct? That means that the Bush tax cuts actually created a new source of revenue, in the form of a check from the IRS, for the poorest Americans that didn't exist before. In effect, millions of poor Americans not only pay no tax, but get paid by the government.

It amazes me how misunderstood that and mischaracterized the tax cuts have been. President Bush wanted them to help everyone, but it is kind of difficult to give a tax break to people who pay no taxes, so they actually went to the extraordinary length of subsidizing the poor. It was the most progressive (sympathetic to the poor) tax policy in American history and still got labeled "tax cuts for the rich". Rhetoric over reality, as usual.

PJ, I don't understand. Bush cut the top bracket from 39.5% to 35% if IIRC. He also cut the dividend/long term gain tax to 10% from it's top rate of 39.5%. He drastically increased the estate tax exemption, and dropped the top rate of the gift tax to 35%. When you are pulling in a lot of money, these rate changes cut your overall tax burden substantially.

Now for the lower income earners, he eliminated the div/long term cap gains tax. That's great except most low income earners don't recieve stock dividends nor long term capital gains. When I worked in public accounting, I don't think I ever saw anyone taxed at this rate. The cuts did do some good and created the 10% tax bracket for the lowest earners, but honestly in relative terms, the top earners saw a substantial (hundreds of thousands and even millions) of dollars in tax savings.

As for strike's point, didn't Obama's budget contain a reversal of them for over 250k earners? It passed the house today which will mean it will become official.