Study says tax cuts aid richest-report
While Bush's tax cuts reduced rates at every income level, they offered the biggest benefits to people at the very top, according to report.
NEW YORK (CNNMoney.com) -- President Bush's tax cuts offered the biggest benefits to families in the highest income categories, according to a study cited in a published report Monday.
Families earning more than $1 million a year saw their federal tax rates drop more sharply than any other group, The New York Times reported, citing a Congressional study by the nonpartisan Congressional Budget Office.
The study also found that tax rates for middle-income earners edged higher in 2004, the most recent year for which data was available, the paper said.
The Times said 2004 was also the first year in which taxpayers could take full advantage of the cuts on stock dividends and capital gains.
Families with average incomes of $56,200 saw their average effective tax rate fall to 2.9 percent in 2004 from 5 percent in 2000, which translated to an average tax cut of $1,180 per household, but the tax rate actually increased slightly from 2003, the paper said.
Households in the top 1 percent of earnings, which had an average income of $1.25 million, saw their tax rate drop to 19.6 percent in 2004 from 24.2 percent in 2000. which translated to an average tax cut of almost $58,000, the paper said, citing the budget office.
Experts say the Democrats are unlikely to make any major tax moves that would increase taxes or otherwise unravel Bush's tax cuts, which are set to expire at the end of 2010.