A Fair Share?
It’s now been 10 years since President Bush signed into law tax cuts that have cost federal taxpayers well over $1 trillion. The Bush tax cuts are currently set to be in place through 2012, though some in Congress would like to extend them for years to come. A recent Budget Project Blog post highlighted the tremendous impact of these tax cuts on the federal deficit.
Citizens for Tax Justice produced a report last week projecting the Wisconsin impact of extending the Bush changes through 2013. Just as we see nationally, the largest share of the Bush tax cuts in Wisconsin would go to the wealthiest. The top 1% of income earners in the state alone would receive 28% of all the Bush tax cut dollars in Wisconsin, almost twice the combined tax savings of the lowest three-fifths of income earners (whose share of the Wisconsin total is just 15%).
The average benefit Wisconsinites would receive under the Bush tax cuts in 2013 is also highly skewed toward top income earners. Taxpayers earning about $50,000 or less annually would receive an average of $495. The top 1% would receive an average tax cut of $54,861, more than 100 times what the lower income earners would receive.
The Center on Budget an Policy Priorities estimates that extending the Bush tax cuts for another 10 years would cost taxpayers more than $5 trillion — dramatically increasing the projected levels of federal debt. If policymakers in Washington instead allow the Bush tax cuts to expire, this precipitous increase in debt levels could be averted. (See Figure 2 in this CBPP report.) Now more than ever, Wisconsinites and policymakers alike need to consider who gets what under the Bush tax cuts and whether it’s a worthy expenditure given widespread concerns over the federal debt.