Bush Tax Plan Extension May Cost Nearly $4 Trillion Over Next Decade

Making permanent Bush’s ‘welfare for the wealthy’ would cost our government $3.7 trillion through the 2009-2018 period alone. Bush Tax Plan Extension May Cost Nearly $4 Trillion Over Next DecadeBy Cliff Montgomery – Feb. 8th, 2008With economic hardship now a reality for most Americans, it’s time for us to take a second look at the Bush Administration’s mistaken tax priorities which caused much of this mess.The Center On Budget And Policy Priorities (CBPP) is “one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs” affecting “low- and moderate-income families and individuals,” according to its mission statement.Since much of America’s current financial woe began with citizens at the bottom of the economic scale and eventually worked its way up to everyone else, the CBPP should provide a special insight into the hubris of the Bush years.On February 4th, 2008, the CBPP published a study entitled, The Skewed Benefits Of The [Bush] Tax Cuts. It takes George W. Bush and his neo-conservative minions to task to putting into law an unrealistic and, in the end, disastrous tax policy that far too generously favors the rich at the expense of everyone else.The Center made its point by setting up a simple estimate.  “Under current law,” the CBPP study states, “nearly all provisions of the 2001 and 2003 tax cuts are scheduled to expire at the end of 2010.”The President’s budget calls for making these tax cuts permanent,” the report adds.”This raises the question:  How would the large sums involved [with permanent tax cuts] be distributed among different income groups?”The enacted tax cuts and their extension carry a high cost,” added the report.  How the CBPP put together the data for its incisive report is simple enough.Two government entities–the Joint Committee on Taxation and the Congressional Budget Office (CBO)– have supplied cost estimates of Bush’s tax cuts and any permanent extension.The Urban Institute-Brookings Institution Tax Policy Center, a joint enterprise of the Urban Institute and Brookings Institution–two private think-tanks–released estimates of the benefit distribution of such provisions.The CBPP then applied “the Tax Policy Center’s distributional estimates to the cost estimates provided by CBO and the Joint Tax Committee,” according to the study.This resulted in CBPP estimates on just how much money from “the tax cuts…would go to each income group,” if Bush’s tax cuts are made permanent.The CBPP discovered that making permanent Bush’s tax-cut provisions would cost $3.7 trillion through the 2009-2018 period alone.  The total estimated distribution of dollars was shown in a table found in the CBPP study:Distribution of the Tax Cuts, 2009-2018Income GroupDollar Amount (In Billions of Dollars)Percentage ShareLowest 20 percent           $18                                                                          0%Second 20 percent          $159                                                                        4%Middle 20 percent            $278                                                                        8%Fourth 20 percent            $500                                                                        14%Top 20 percent                 $2,735                                                                     74%——————————————————————————————————————Total                                   $3,700                                                                     100%The top 1 percent of households would receive $1,138 Billion, or nearly one-third (31%), of all Bush tax cuts. Those “with annual incomes of more than $1 million — a group that comprises the highest income 0.3 percent of the population,” states the CBPP report, “would receive $812 billion in tax cuts. This represents 22 percent of the total value of the tax cuts over the period,” adds the study.But under permanent Bush tax cuts, a full 60 percent of American households would have to parcel out a paltry 12 percent of any “tax relief”–with the poorest 20 percent of our fellow Americans getting less than one half of 1% of the tax cuts intended to help all.One factor in this study should be noted:”The estimates assume that relief from the Alternative Minimum Tax is continued,” stated the CBPP study.”Without extension of AMT relief, the AMT would cancel out a substantial portion of the 2001 and 2003 tax cuts,” the report added.Like what you’re reading so far? Then why not order a full year (52 issues) of thee-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!