The Truth About the 2001-2003 Tax Cuts

Guinevere Nell / August 04, 2010

In the battle over the extension of the 2001/2003 tax cuts, a lot of myths about the tax cuts are being perpetuated. One of the common myths is that the Bush tax cuts disproportionately favored the wealthy, shifted the burden of taxes from the rich to the middle class, and made our tax system less progressive than most wealthy nations.

First, although there was a slight shift of burden to the middle class immediately after the 2001 tax cuts were passed, as the higher earners (and businesses) grew their savings, investments, and wage funds, their share of the tax burden rose. By 2007, the highest earners were paying a significantly larger share than they had previously, and today the tax burden of top 1 percent exceeds that of bottom 95 percent. (more…)