10 Years of Tax Cuts for the Rich, 10 Years of Increased Debt

June 8, 2011 at 8:27 pm Leave a comment

June 7, 2011, marked the 10th anniversary of Bush tax cuts that disproportionately benefited wealthy Americans. The rich are opening champagne bottles to celebrate, while advocates for older people and people with disabilities are trying to stave off the cuts to Social Security, SSI, SNAP, Medicare and Medicaid that some claim are needed so that these cuts can continue or even be expanded.

Why are the wealthy celebrating? According to the Center for Budget and Policy Priorities, people with incomes in excess of $1 million saw a 6.2% increase in after-tax dollars as a result of the tax cuts, as opposed to the 2.2% increase experienced by average families earning $40,000-$50,000 per year.  The average dollar tax benefit per tax payer for millionaires was $128,832 (or about three times the income of the average family).  The average dollar tax benefit per tax payer for the $40,000-$50,000 tax payers was $860.

What’s more, CBPP says that the cost of extending tax cuts for the richest Americans is about the same as the projected Social Security shortfall as a share of the gross domestic product (GDP) over 75 years, .7% for tax cut extensions versus .8% for the Social Security shortfall.

And finally, if the tax cut for the rich was allowed to expire, the increase in the debt would stop over the next 10 years.

So why are we talking about capping spending for programs that help middle and low-income Americans, or turning Medicare into a voucher program and Medicaid into a block grant?  The simplest solution would be drink one more glass of champagne for the Bush tax cuts and let them wither away on the vine.

Entry filed under: Uncategorized.

New York Says No So – What Would You Do? Real Solutions for Medicare Solvency and Reducing the Deficit

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