In July, the Center on Budget and Policy Priorities (CBPP) released a report that measured the tax benefits from the Bush tax cuts and which Americans were receiving them. Their findings reinforce what most of us have been feeling for some time – the greatest benefit from these cuts went to the wealthiest few, while the rest of Americans received significantly less benefit.In their report the CBPP calculated the average value of the tax cuts per household since 2004 using data from the Tax Policy Center. In a report that will be released later tomorrow, Innovation Ohio used these calculations to look at what percentage of these tax cuts went to which households. As you can see in the chart below, our findings show that households that made over $200,000 a year received 73 percent of all tax benefits from the Bush tax cuts. This left the remaining 27 percent of benefits to be split between 98 percent of all households in America. proposal to reach a deal on the deficit put forth a plan that raises the top rates for the richest two percent but keeps the Bush tax cut in place for the other 98 percent of Americans. The president and Congressional Democrats understand that to protect entitlements like Social Security, Medicare and Medicaid, we have to ask the wealthiest in America to pay a little more. Considering that they have been the main beneficiaries of economic policy over the last nine years, this only seems fair.
Why Raising Taxes on the Wealthiest Americans Is Not Class Warfare
A common throw away line from conservatives in the fiscal cliff debate is that progressives or Democrats are “waging class warfare.” The trash is truly where that line belongs. The fact is that aside from a few years during the Clinton era in Washington, the economic game has been more than rigged for special interests and corporations at the expense of working Americans. There are many facts to illustrate this, here are just two:
- Corporate profits in the U.S. have recently hit an all-time high. This comes just after the worst recession since the Great Depression and in the midst of several years’ worth of sluggish growth for the overall economy. Even with the last three U.S. recessions, corporate profit margins have been in a fantastic uptrend since the early 1980s.
- Wages in the U.S. are at a historic low as a percentage of the overall economy. Wages in the U.S. have been on a downtrend since 1970. Compared to the parabolic rise in corporate profits since the end of the Great Recession, wages have continued to slide.