http://www.wsws.org/articles/2004/sep2004/tax-s28.shtml<edit>
The combined impact of all the new tax provisions has not yet been precisely calculated. But one preliminary study by the Center on Budget and Policy Priorities (CBPP), a well-established domestic policy think tank, found that households in the middle fifth of the income spectrum would receive an average tax cut of $169 in 2005. Households in the top fifth would get an average tax cut of $1,196, while households with incomes between $200,000 and $500,000 would receive an average of $2,172. Lower-income families will gain virtually nothing from the new law.
In terms of total benefits received, households in the top 10 percent will receive 44 percent of the additional income in 2005. Households in the top 20 percent will receive 68 percent of the additional income, while households in the middle 20 percent of households will receive only 10 percent of the total. As the CBPP noted ironically, this is “a peculiar outcome for a ‘middle-class’ tax-cut bill.”
This distribution of the tax cuts is a deliberate policy choice. In the case of the $22.6 billion from a one-year postponement of the alternative minimum tax, 96 percent will go to the top one fifth of households. The tax break for two-income married couples will extend 72 percent of its benefits to the same top fifth.
The benefits for middle-income families come mainly from the extension of the child tax credit. An effort to make this credit available to low-income families who do not pay income taxes—essentially the bottom third of the income spectrum—was defeated by adamant Republican opposition. Although the cost was trifling in terms of the overall size of the bill, between $4 billion and $7 billion over 10 years, right-wing congressmen and senators insisted that such a provision would amount to reestablishment of welfare payments to the poor.
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