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Shocker: Rich gain most from Bush tax cuts

So says a new report by Citizens for Tax Justice:

The report finds that:

 

• The majority of the benefits of the tax cuts for capital gains and dividend income go to the richest one percent in every state.

 

• Revenue collected by the capital gains tax was much higher during the Clinton administration, when the tax rate on capital gains was higher.

 

Karen Malcolm, executive director of Ocean State Action states, “The timing of this well-researched report is important to understanding the economic woes we face here in Rhode Island.  We see a significantly widening gap between rich and poor, a declining middle class, and a structural state budget deficit that is used as an excuse for gutting Rhode Island’s social safety net, and steep increases in property taxes.”

 

The new report shows that among Rhode Islanders more than 65% of those benefiting from the Bush tax breaks earn over $422,000 annually, with an average income of $1.2 million. The tax windfall realized by these wealthy households under the Bush tax cut averages $20,482 each. Malcolm points out, “Rhode Island’s wealthiest have hit the trifecta. When you add the federal tax windfall to the state’s cut in the tax on capital gains and the alternative minimum tax available only to the highest income households,  this group saves more than $30,000 a year for themselves. This comes at significant cost to Rhode Island’s middle, moderate and low-income families. The cost of just these two state tax cuts will be $62.4 million in 2009, at a time when there is a desperate need for revenue to close the state’s deficit.”

        

As middle, moderate and low-income Rhode Islanders continue to struggle with skyrocketing gas, housing and food prices and as the state enacts deep cuts to healthcare, education and other important social programs, Malcolm argues, “we must be ever-vigilant in ensuring that every Rhode Islander contributes their fair share in Federal and State taxes to help meet top priorities and to ensure every person has the opportunity to get ahead.”   

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