Originally posted by sh76
No, a true "across the board" tax cut is one that cuts everyone's taxes by the same percentage. Obviously, you cannot cut someone's taxes if that person is not paying taxes.
The Bush tax cut lowered almost every marginal rate. It was the definition of an across the board tax cut.
By your logic, every tax cut is a tax cut for the rich because the rich pay is a redundancy. Either way calling the Bush tax cut a "tax cut for the rich" is wrong.
Your taxes cannot be cut if you don't pay taxes. Obviously. Therefore if you don't pay taxes, you aren't "on the board" in the first place. That argument is irrelelvant when discussing tax cuts. Besides, there are usually credits, or refunds given to poor people as part of the package but those refunds/credits are far below the value of the tax cut for the rich boys.
My example was simplified but in most graduated tax systems, ie non-flat tax systems, the tax rates are applied at differring income levels and those tax rates generally increase with income.
For example:
0-10K 0%
10-50K 20%
50-100K 30%
100K+ 40%
A 1% tax cut "across the board" would see each rate above the 10K threshold reduced by one so we would see:
0-10K 0%
10-50K 19%
50-100K 29%
100K+ 39%
Now then, to understand the tax system you have to understand that if you make say $99,999your entire income is NOT taxed at 39%. Rather the first 10K you earn has no tax applied to it, the next 10-50K is taxed at 19%, and your remaining 49,999K is taxed at 29%
This means you pay the following:
0-10K $0
10-50K - $7600
50-100K - $ 14500
Total $22,100. You would have paid $23,000 so you save $900 bux (in this example)
Now take someone that makes $1,000,000
0-10K $0
10-50K - $7600
50-100K $14500
100K+ $351000
Total tax paid, $373,100. You would have had to pay $383,000 so you save $9,900
So, lets review. Your middle class dude gets $900 bux and your rich dude gets $9,900. That's what is referred to as "across the board" tax cuts, where the "Board" is the levels of taxation. "Across" means ALL. So "across the board" means "alll levels of taxation are reduced".
The beef is that this is not an equitable distribution of cash. Governments could reduce part of only one of the levels. Say the first 10-50K level in this example. It would mean that EVERYONE gets the same money returned to them. By reducing all income tax levels you are ensuring that those people with incomes below the higher tax levels don't receive any benefit.
Rich people benefit when the lower tax levels are reduced the same as middle class people do. But when you also reduce the upper income tax levels, ONLY THE RICH PEOPLE benefit.
This is why "across the board" tax cuts benefit rich people more than they do the poor and middle class.
(It explains why politicians are being dishonest when they say "we are going to bring in tax cuts aimed at the middle class" because rich people get the same benefit too"....the only tax cut that would only benefit rich dudes is if the government reduced only the upper tax level since most of us make less than $100K)
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