Tax cuts for America’s top earners are costing everyone, every hour of every day, a new report from the National Priorities Project finds.
Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priorities Project. America’s top earners will get an average tax cut of $66,384 in 2011, while the bottom 20 percent will get an average cut of $107.
The report comes as party leaders wrangle over the best way to curb the nation’s budget deficit, protesters around the world demonstrate against income inequality and corporate greed and Republican presidential candidates offer their economic plans to voters. Former pizza company CEO and Republican presidential candidate, Herman Cain, has been getting lots of attention in recent weeks for “999 Plan” which would cap the corporate, income and sales tax rates at 9 percent.
President Barack Obama unveiled his deficit reduction plan last month, which aims to curb the national debt through a combination of tax cuts and increased spending. The plan includes a proposal to increase taxes on millionaires -- the so-called Buffett rule, name for famed billionaire investor Warren Buffett. In an August op-ed in The New York Times, Buffett argued that lawmakers should put an end to tax breaks for the “super-rich.”
After Obama announced the proposal Republican leaders criticized the Buffett rule calling it “class warfare.”
Still, there are some Republicans who support increasing taxes on the wealthy. Former Federal Reserve Chairman Alan Greenspan -- a registered Republican -- told CNBC earlier this month that he supports allowing the George W. Bush-Era tax cuts for the wealthy to expire.
That could because the tax cuts are weighing on the national debt. The non-partisan Center for Budget and Priorities found that the the cost of tax cuts for upper-income earners is as big as the Social Security shortfallover the next 75 years. If the U.S. reverted to Clinton-era marginal tax rates, the U.S. Treasury would net an additional $72 billion annually, according to Citizens for Tax Justice.
In addition, increasing taxes on the wealthy could also help to narrow the widening wealth gap. The net worth of the bottom 60 percent of U.S. households -- about 100 million households -- is lower than that of Forbes 400 richest Americans. Tax cuts for the wealthy provided Americans making more than $1 million with a $128,832 benefit, while Americans earning from $40,000 to $50,000 got an $860 benefit on average.
CORRECTION: A previous version of this post mistakenly attributed the report to the National Priority Foundation. It is the National Priorities Project. A previous version of this post also mistakenly said the Bush-era tax cuts would cost the same as the Social Security shortfall for the ten years after it was enacted. The cost of tax cuts for upper income earners is the same as the Social Security shortfall for the next 75 years, the Center for Budget and Priorities estimates.
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