Income tax cuts benefit all payers
Americans of every income have benefited from a drop in federal income tax rates as Bush administration tax cuts enacted since 2000 took effect, an independent analysis of newly released IRS data shows.
The analysis showed, for example, that a taxpayer who earned $35,000 in 2000 would have paid 8.54% of that income — $2,989 after credits — in federal taxes. In 2004, federal taxes would have accounted for 5.12% of that taxpayer's annual income, or $1,792. That represents a 40% decrease in tax burden.
At the higher end of the income brackets, a $1.75 million earner would have paid $513,625 in 2000 federal taxes, when the rate for that earning bracket was 29.35%. Four years later, when the rate dropped to 25%, that earner would have paid $437,500. That represents a 14.8% cut in tax burden, the analysis shows.
Millions of lower-income Americans — those earning $25,000 annually or less — have been taken off the federal tax rolls. In 2000, roughly 29 million tax returns had no federal tax owed. Four years later, the number rose to about 43 million returns.
Thanks to Todd for sending the link.