New estimates from Congress’s Joint Committee on Taxation indicate that millionaires would benefit a disproportionate amount from extending the tax cuts for income at all levels.
According to the estimates released Monday, the average millionaire would see a tax cut of $74,505 in 2013 if all of the Bush tax cuts were extended. That yearly cut would grow to $188,407 by 2021.
In contrast, the JCT estimates that the average American with pre-tax earnings between $50,000 and $75,000 would see a tax cut of approximately $1,034 if the tax cuts were extended for them. Congressional Democrats and the Obama administration want to limit the tax cuts only to adjusted gross incomes above $200,000 for individuals and $250,000 for married couples.
The JCT estimates that 81 percent of the high-income Bush tax cuts, on income above those thresholds, would go to households with incomes over $1 million.
“An extension of the high-end Bush tax cuts would continue to reap a tremendous windfall on the very wealthiest and push our nation much deeper into debt,” said House Ways and Means ranking member Sander Levin, D-Mich., in a statement.
House Republicans on the Ways and Means Committee countered that, according to the JCT , individual rates also apply to pass-through businesses. If Congress “only” allowed the top two rates to rise in 2013 on incomes over $200,000 for individuals and $250,000 for couples. 940,000 small businesses would pay higher taxes, and 53 percent of small business income would be subject to higher taxes. They also cited a separate study from the Tax Foundation that found the top quintile of taxpayers pays 94 percent of all income taxes.
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