Economic Snapshot | Trade and Globalization

Bush tax cuts not best way to help middle class

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for February 14, 2001.

Bush tax cuts not best way to help middle class
President Bush claims that his proposed tax cut removes the toll gate to the middle class. The chart below shows the difference between the Bush plan and the Simplified Family Credit (formerly known as the Universal Unified Child Credit), a policy proposal that costs only one-fourth as much as the president’s plan.

Tax plans and working families

It is easy to see that, for those earning under $35,000, a much less expensive proposal like the Simplified Family Credit does much more for these families. Rather than remove the toll gates, perhaps President Bush would be better advised to lower the drawbridge.

NOTE: The calculations in this figure reflect the benefits of Bush’s proposals for an increase in the nonrefundable Child Tax Credit, a new 10% bracket, and a new two-earner deduction. The calculations are actually biased in favor of the Bush proposal, in that the Single Family Credit proposal would be fully implemented this year and indexed, while the provisions in Bush’s plan would not take effect until 2006.

This week’s Snapshot by EPI economist Max Sawicky.

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