Almost one-third of Oregon households will not receive any tax reduction under the Bush Administration’s proposal to accelerate previously enacted tax cuts and exempt dividends from personal income taxes, according to a study released today by the Washington, D.C.-based Citizens for Tax Justice (CTJ). The study shows that 30 percent of all households will get zero benefit and 50 percent will get a tax cut of less than $100 under the Bush plan. While most of these households pay a considerable amount in federal payroll and excise taxes, they are left out of the Bush Administration’s plan, which targets dividends on stocks, primarily owned by the affluent.
About 511,000 Oregon households will receive nothing from the Bush Administration’s proposal. The share of Oregon households that will not benefit from the tax cut proposal is similar to the national average.
Download a copy of this news release:
Almost One-third of Oregon Households Will Get No Benefit Under Bush Tax Cut (PDF), January 27, 2003.
Download the Citizens for Tax Justice national news release (PDF).
See the recent analysis, A “Reality Check” on Recent Arguments In Favor of the Administration’s New “Economic Growth” Plan from the Center on Budget and Policy Priorities.
These households receive no tax relief because they, like 80 percent of Americans, don’t directly own stocks, and their incomes are low enough that they do not have federal income tax liability. “Since the Bush tax cut will lead to reduced spending on health care, education, and other popular programs in the future, these families won’t just be left out, they will be worse off,” said Jeff Thompson, an economist and policy analyst with the Oregon Center for Public Policy.
Recent analysis by the Center on Budget and Policy Priorities shows that the Bush tax cut will reduce Oregon state government revenues by more than $90 million each year. Unless Oregon acts to end the automatic coupling of the state income tax to the federal definition of taxable income, the Bush proposal to exempt dividend income will result in decreased state tax revenue.
The Bush Administration has promoted its plan as having an “average” benefit of $1,083. Nationally, 8 out of 10 taxpayers will receive considerably less than $1,083. The “average” benefit is skewed by very large tax cuts going to affluent households. According to Citizen’s for Tax Justice, the “typical” taxpayer nationwide would see a tax cut of $289 in 2003.
The centerpiece of the Bush plan, exempting dividends, delivers 49 percent of its benefit to the top one percent of taxpayers nationally, and the entire package gives 32 percent of the benefit to the top one percent. The bottom 60 percent of taxpayers nationally get just 8.5 percent of the total tax cut. The average tax cut for the bottom sixty percent of taxpayers is $131 in 2003, compared to $30,127 for the top one percent.
The Oregon Center for Public Policy is a Silverton, Oregon-based non-profit research institute that uses research and analysis to advance policies and practices that improve the economic and social prospects of low- and moderate-income Oregonians, the majority of Oregonians.
NOTE TO EDITORS AND REPORTERS:
The full text of the report is available at the OCPP website, http://www.www.ocpp.org. Almost One-third of Oregon Households Will Get No Benefit Under Bush Tax Cut