Tuesday, May 20, 2008

EDITORIAL >>Most don’t see tax benefits

Here is a small statistic that might have big meaning for you. It’s supplied by Citizens for Tax Justice, the think tank that constantly crunches numbers from the Treasury Department’s data files on taxes.

Almost four of every five dollars in tax cuts given to Arkansas taxpayers in the big capital gains and dividend tax cut in 2003 goes to the richest 1 percent of Arkansans. There are a little more than 11,000 of them — out of roughly 1,100,000 people who file federal tax returns — and they earn from $365,000 on up each year.

The big tax cut in 2003, plus others offered by Presi-dent Bush and enacted by Congress between 2001 and 2004, account for a little more than half of the $3 trillion that have been added to the national debt since 2001. The wars in Afghanistan and Iraq and general spending on research, development and production of military hardware account for most of the rest of the debt.

The president wants the tax cuts made permanent before they expire soon after his term ends. Sen. John McCain, who once opposed most of them because he said they were weighted toward the richest Americans and would expand the national debt, now joins Bush in demanding that they be continued.

So how did the tax cuts affect us in Arkansas? Have they been a bonanza for working Americans, as Bush and McCain maintain?

You know that phasing out the estate tax benefited only about 1.5 percent of the heirs of estates, those inheriting estates valued in the millions of dollars. The corporate tax cuts benefited only the — well, corporations and their owners. As for the big reduction of income taxes on capital gains and on corporate stock dividends, which Bush says was a bonanza for middle-class Americans, the lowest earning 60 percent of Arkansas taxpayers — those with net incomes of $44,000 a year or less — received slightly less than half of one percent of the benefits to Arkansans.

In other words, some 650,000 Arkansas families divided half of one percent of the tax savings for Arkansans. The lowest 80 percent received less than 5 percent of the proceeds. The top 1 percent, people netting more than $365,000 a year, got 78.3 percent.

So you know who were helped by the vast accumulation of national debt, you and your children will one day have to pay.
Now, another question: Which income groups bear most of the personal burdens of war, the other big component of the debt?