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Posted at 9:32 AM ET, 12/ 6/2010

The Bush tax cuts in one chart

By Ezra Klein

It's time, I think, to repost this chart showing how much taxpayers at different income levels would get from the Democratic plan, which was to simply extend the cuts for income under $250,000, and the Republican plan, which was to extend the cuts for everyone:

Thumbnail image for GR2010081106717.gif

The term "tax cuts for the middle class," which Democrats like to use, has misled. As you can see from the left side of the chart, the "tax cuts for the middle class" also cut taxes on the rich. A family that makes $750,000 a year would pay lower taxes on the first $250,000 of their income. The question has never been whether only middle-class workers should get a tax cut. It's how much income the tax cut should cover.

By Ezra Klein  | December 6, 2010; 9:32 AM ET
Categories:  Charts and Graphs, Taxes  
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Next: What 'millionaire' now means -- at least in Washington

Comments

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Also look at www.democratz.org

Posted by: WWWoDEMOCRATZoORG | December 6, 2010 10:26 AM | Report abuse

Ezra:
Why couldn't the Democrats suggest an extension of the >$250K tax cuts only for small businesses of say between 5-50 employees? Although its not distinguishable in current tax code it seems like the IRS could make this work, and then the small business argument could be negated. Seems hard for the Republicans to object to that.

Posted by: pdave | December 6, 2010 10:36 AM | Report abuse

@pdave:

quoting my post in another thread:

"i do think a neat 'compromise' would be to provide $50,000 worth of bush tax rates to people for each employee they provide health care benefits to. e.g., a small business owner with ten employees would get $500,000 worth of bush rates (on top of an intitial 250K or starting from 0K, for this post's sake it doesn't matter)."

something like that?

Posted by: eggnogfool | December 6, 2010 10:39 AM | Report abuse

Quit fooling yourself.

The dems want to keep ALL the bush tax cuts.

Otherwise they would have passed legislation by now to modify them to exclude the rich. The dems had the votes and two years to fix this, do obviously they didn't want to.


Posted by: lauren2010 | December 6, 2010 11:02 AM | Report abuse

Here's a moving chart, showing the distribution of income, the distribution of taxes, the paltry effects on growth, and the outlook for the deficit:

http://www.youtube.com/user/leearnold#p/u/3/SA1f2MefsMM

Posted by: Lee_A_Arnold | December 6, 2010 11:37 AM | Report abuse

The Dems need hire someone like a Frank Lutz to package their proposals in a better way to the media & the public. The GOP is MUCH better at this than Dems.

Posted by: kromerm | December 6, 2010 11:40 AM | Report abuse

lauren2010, if the last two years have taught us anything, it's that talking about things the "dems" want as a monolithic group is dangerous territory. For all we know Bernie Sanders has been talking with people behind the scenes for years trying to convince them to let the tax cuts expire while Ben Nelson has been lobbying for full, indefinite extension. Saying that the Dems "had the votes" to do your preferred outcome assumes too much.

Posted by: MosBen | December 6, 2010 11:59 AM | Report abuse

The Dems need hire someone like a Frank Lutz to package their proposals in a better way to the media & the public. The GOP is MUCH better at this than Dems.

Posted by: kromerm | December 6, 2010 11:40 AM | Report abuse


-----------


Do you mean that the dems should lie about their bills like the republicans do?

Two wrongs don't make a right.

Posted by: Independent4tw | December 6, 2010 12:17 PM | Report abuse

Ezra, what explains the discrepancy between those earning over one-million and those earning earning between $500,000 and $1,000,000? Wouldn't both groups get the exact same tax breaks up to 250,000?

Posted by: ekenney1 | December 6, 2010 12:29 PM | Report abuse

So that we are very clear in future discussions.... there are 42 Republicans in the Senate that insist we add another "trillion dollars" to the deficit for our children and grandchildren to repay.

Our debt ceiling presently stands at 14.3 trillion and the first order of business in 2011 will be the need to raise that ceiling for the benefit of the wealthy and at the expense of the middle class.

When will this insanity end? Any Bill that leaves the Senate with a continued tax relief for the wealthy should be "shot down in flames" by the Democrats in the House of Representatives.

What will the voters do? Remove them from office?

Posted by: motiv8ed | December 6, 2010 12:37 PM | Report abuse

"Do you mean that the dems should lie about their bills like the republicans do?

Two wrongs don't make a right.
"


Why? That lying sh*tbag Lyndon Johnson made completely false claims about Medicare and Vietnam.

Posted by: krazen1211 | December 6, 2010 2:16 PM | Report abuse

"Do you mean that the dems should lie about their bills like the republicans do?

Two wrongs don't make a right.
"


Why? That lying sh*tbag Lyndon Johnson made completely false claims about Medicare and Vietnam.

Posted by: krazen1211 | December 6, 2010 2:16 PM | Report abuse

Why isn't Obama barnstorming the country telling Americans that millionaires will get a $100,000 tax cut from Republican plans?

What is wrong with this man that he takes a winning hand and folds every time?

Posted by: AxelDC | December 6, 2010 3:35 PM | Report abuse

Ezra, this is possibly the most tortured, deceptive piece of logic I've ever seen from you. What you have here is a picture of how much the two plans would give back ***after the Bush tax cuts had expired***. Surprise, surprise, both plans give back something. But don't you find it a little deceptive not to include a chart showing how much extra each of the brackets will pay net of both the new plan **and** the expiration?

I grant you, that chart doesn't make your point, but if you're trying to convince us that everybody gets money back, that puts you into "liar, liar, pants on fire" territory.

I've always respected you as somebody who would at least present the policy choices honestly, even when I disagreed with you. This one's beneath you.

Posted by: theradicalmoderate | December 6, 2010 5:25 PM | Report abuse

I see that Jimmy Carter has decided to negotiate with terrorists. That worked out so well for him, didn't it, Obama? Buh, bye, you weakling.

Posted by: MagicDog1 | December 6, 2010 5:39 PM | Report abuse

Is this adjusted gross income? Because the lay person assumes it's their income (block whatever on their W-2). Makes a difference.

Posted by: leu2500 | December 6, 2010 8:10 PM | Report abuse

Dear author psst it s not your money it is the money of the people who earned it.

Why do you think you have a right to take other people's money and give it to people whose parents chose to party instead of going to school and learning how to support themselves and men who chose to impregnate young women and dump their children on the streets instead of nurturing and caring for the mothers of their children and their own baby boys and girls and who chose instant gratification over raising their own children.

If you want justice solve the real problem the 70% unwed motherhood rate in America's inner cities. The solution? Men stop being cowards and take care of your own children and their moms. Stop aspiring to be playas and start aspiring to dads. Women cross your legs if your man is playing you.

Posted by: msmithnv | December 8, 2010 2:09 AM | Report abuse

The rich, at least 42 senators and the President, manage to scrooge the bottom 80% of the taxpayers in this country.

The loss of discretionary income for the bottom 4/5ths of the country is the greatest threat to this nation. Even healthcare pales in comparison. And it furthers growing imbalance of wealth in the country between the lower and middle classes, and the rich. Such an imbalance will ultimately destroy this country even more thoroughly than any nuclear exchange or terrorist action.

Posted by: mhoust | December 8, 2010 10:04 AM | Report abuse

This is how I see the issues presented above:

1. The GOP knows how to use PR better than the Dems. The Dems need better PR, which doesn't have to be lies, just a better definition of what is involved.

2. Ezra's chart is a fairly correct representation of the two plans, and also, a fair representation of what would go toward the deficit with regard to each plan if all cuts were allowed to expire.

3. I looked at the You Tube video, and think it is a fairly close explanation of the economics of how Reagan's trickle down economics works, which is still the way the GOP believes. The website for the You Tube video again is http://www.youtube.com/user/leearnold#p/u/3/SA1f2MefsMM

4. You might want to read a book by Nixon's Chief Council, John Dean called "Broken Government". He was an insider in the GOP for many years.

At one time, I felt that I was a moderate, somewhere between the Dems and The GOP, but now, find that I stand to the left of the Dems, even though my beliefs and standings have not changed. Both parties have moved far to the right since Nixon took office.

Posted by: OutThere1 | December 8, 2010 12:23 PM | Report abuse

I'm very much against extending the Bush era tax cuts to the wealthiest of all Americans, but this is particularly bad chartmanship (not a real word, but work with me here). First of all, it describes income level, and not taxable income, which is what the discussion is really about. Second, the income break of 200k-500k takes into account people that are on either side of the proposed elimination of the tax cut, so it's not making a clear distinction between the two sets of taxpayers. Thirdly, having a category called $1,000,000+ is very misleading. If you make $1,001,000/year, you will not save 100,000 on your taxes. A quick calculation of 1 million in taxable income shows that you would save about 22k per year. Not shabby, but still very misleading. I just think that this chart is set up purposely to exaggerate the effect to help a particular side of the debate, as opposed to informing the public so that the debate can be better.

Peace,
Cosmo

Posted by: cosmo10 | December 9, 2010 12:56 PM | Report abuse

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