There are few surprises in a study by the nonpartisan Congressional Budget Office, which reveals families earning more than $1 million a year saw their federal tax rates drop more sharply than any other group in the country. The study just offers proof of the most common criticism of President Bush's tax cuts -- that they benefit the wealthy and deliver far less benefit to average Americans.
Still, that verification is worth having. Bush still insists that the tax cuts are necessary in order to invigorate the economy. But with only 1 percent of Americans reaping the greatest benefits -- there were cuts at every income level, but only marginal ones for most -- the policy far more immediately has widened the gap between haves and have-nots, without a lot of trickle-down economic boost.
While both those who support and oppose Bush's tax-cut policies will try to use the report to their advantage, it's hard to argue the numbers: families in the middle fifth of annual earnings, who had average incomes of $56,200 in 2004, saw their average effective tax rate edge down to 2.9 percent in 2004 from 5 percent in 2000. That meant an average tax cut of $1,180 per household, with the tax rate increasing slightly from 2003.
Households in the top 1 percent of earnings, which had an average income of $1.25 million, saw their effective individual tax rates drop to 19.6 percent in 2004 from 24.2 percent in 2000. That's more than twice the percentage drop.
Bush's tax cut adversaries certainly have sufficient ammunition to go after the president on what has proven a gift to the already gifted, and not as the tide that would raise all boats as he promised. Congress is debating whether to make the Bush tax cuts permanent. Members of Congress ought to think first about paying for the war, fixing Social Security and Medicare -- and the need to stop running record federal deficits.