September 26, 2006

BUSH’S TAX CUTS: Bad for the rich?

The 2003 tax cut was the third in three years, but the tax code still remains highly progressive. The average tax rate ranges from 2.97 percent of income for the bottom half of the earning spectrum to 23.49 percent for the top 1 percent.

The top-earning 25 percent of taxpayers (AGI over $60,041) earned 66.1 percent of nation’s income, but they paid more than four out of every five dollars collected by the federal income tax (84.9 percent). The top 1 percent of taxpayers (AGI over $328,049) earned approximately 19 percent of the nation’s income (as defined by AGI), yet paid 36.9 percent of all federal income taxes.

What’s more, TaxProf notes that people in the top half of the income distribution are paying the highest share in decades.