FactCheck.org
Here We Go Again: Bush Exaggerates Tax Cuts
Now that the general election campaign is nearing, President Bush has resumed a sales pitch for the tax cuts he's signed. But he persists in making some misleading claims.
At a 24-minute appearance in the White House complex on Feb. 19, the President wrongly stated that "everybody who pays taxes" is getting a cut, which is not true:
Bush: We cut the taxes on everybody who pays taxes. I don't think it makes sense for tax-cutters to say, okay, you win, and you lose. My attitude was, if you pay taxes, you ought to get relief. And we cut all taxes,
In fact, all taxes were not cut and millions who pay only federal payroll taxes got no benefit from Bush's cuts.
It is true that everybody who paid federal income taxes is getting a cut. But according to the nonpartisan Tax Policy Center , 35.6 million individuals and families got zero benefit from the Bush cuts because their income was so low they were not paying federal income taxes before the cuts. This number includes 15.1 million workers who are paying federal payroll taxes for Social Security and Medicare. That's 15 million "taxpayers" who were left out.
The President also bobbled the numbers when describing the average size of the cut. Here's the official White House transcript of what he said, which was wrong, along with the footnotes inserted later by the White House staff to correct the record:
Bush: The tax relief we passed, 11 million* taxpayers this year will save $1,086* off their taxes. . . .
(* 111 million taxpayers will save, on average, $1,586 off their taxes.)
The $1,586 figure is indeed an accurate statement of the average cut received by those who are getting a cut, according to the Treasury Department. However, it is far from typical.
For one thing, the figure does not take into account the 25% of all individuals and families who are receiving zero tax cut this year. It is an average only of those who are getting some cut. When those who get nothing are added in the average cut drops to $1,217, according to the Tax Policy Center.
But most importantly, the average is inflated by the fact that most of the money is going to a relatively few taxpayers at the top of the income scale, as seen from the following table distilled from a more extensive analysis by the Tax Policy Center:
Taxpayers making more than $1 million a year get an average cut of nearly $113,000 this year. Such huge cuts at the top tend to pull up the numerical average that the President is fond of citing.
A more meaningful number is the median -- or mid-point. The Tax Policy Center calculates the median cut received for income earned in 2003 is $470.
That means half of all individuals and families get less than that, and half get more.
Even the median figure doesn't give a full picture of how the benefits are spread around, however. Taxpayers make out very differently depending on whether they are married or single, and how many children they have under age 17.
That's because much of the tax relief for 2003 comes in the form of a tax break for married couples -- reduction of the so-called "marriage penalty" -- and a doubling of the tax credit granted for each child under 17, to $1,000 per child. Those do nothing to benefit single taxpayers -- including unmarried workers and millions of elderly widows and widowers, for example. In fact, the Tax Policy Center calculates that nearly 13 million of those over age 65 will get no tax cut.
On the other hand, the Bush cuts do reduce income taxes for many middle-income families to zero this year -- taking them off the federal income tax rolls entirely.
