Tax Cuts For Who?

In terms of who benefited from the Bush tax cuts, we need to recall that the lowest rate was reduced from 15% to 10% by that tax cut. Was this really a “tax cut for the rich” as advertised?.

An income of $8500 saw a tax bill of $1275 reduced to $850; 33%.

An income of $50,000 saw a tax bill of $10,588 reduced to $8530; 19%.

An income of $200,000 saw a tax bill of $60,051 reduced to $60,520; 16%.

A $500,000 income saw a tax bill of $175,670 reduced to $151761; 13%.

So who is the big gainer, someone whose tax was reduced by 33% or someone whose tax was reduced by 13%? The pattern is pretty clear; the larger your income, the smaller the percentage of your tax cut. But we refer to that as the “Bush tax cuts for the rich.” Context matters.