Get this: The Bush tax cuts benefited the wealthiest Americans at the expense of the rest of us!

It really is this simple: the Bush tax cuts went to the very wealthiest Americans. Finally, the non-partisan (although they work for the Republican controlled House) Congressional Budget Office has been forced to admit that fact.



More than one-third of Bush's tax cuts have gone to people with the top 1 percent of income, who have earned an average of $1.2 million annually, according to the Congressional Budget Office.



Still, the Republicans would have you believe that the Bush tax cuts have somehow benefited you. "But the wealthy pay the most," the Republicans argue, "and so, of course, they ought to get the most benefit."



Putting aside their silly suggestion that comparing the dollar value of tax savings is meaningful at all, there are three problems with that analysis:



1) There has been a 62% reduction in the tax rate on qualified corporate dividends (from 39.6% to 15%) since Bush started, and the wealthy are much more likley than you or me to receive corporate dividends.



2) Long-term capital gains are now taxed 25% less than when Bush took office (down now to 15% from 20%) and the wealthy can much more easily arrange their affairs to receive long-term capital gains instead of ordinary income.



3) The Republicans' analysis always ignores payroll taxes, which are 15.3%, and instead focuses on the reduction of the lowest income tax bracket from 15% to 10%, but even the lowest paid wage earner will pay both income and payroll taxes.



So how does that all play out?



A wage earner fortunate enough to earn more than a few thousand dollars a year will pay 25.3% (10% in income taxes plus 15.3% in payroll taxes).



A wealthy investor can easily arrange his or her affairs to collect only corporate dividends and capital gains, which will never be taxed at more than 15%.



Here's the fact: Thanks to the Bush tax cuts the wealthiest Americans, who can rely of investment income, now pay 40% less than the lowest paid wage earners.



The only thing the Republicans can truthfully say about the Bush tax cuts is that they did bring some benefit to almost everyone. And that's exactly how they are trying to spin it: "It doesn't matter who you are, the report shows that you are better off now than you were before the tax cuts,'' said a House Republican aide. "It's showing that everybody's tax burden has gone down as a result of the tax cuts.''



That may be true in a narrow technical sense, but it is as misleading as can be. The Bush tax cuts did reduce tax rates in all income brackets. But wealthy Americans in the very top income categories fared better by almost any measure.



According to the Congressional Budget Office the average after-tax income increased:

10.1% - for people in the top 1 percent of income earners



2.3% - for those in the middle 20 percent of income earners



1.6% - for those in the bottom fifth

New York Times: Report Finds Tax Cuts Heavily Favor the Wealthy