Tax Cuts For Wealthy Americans Cost Treasury $11.6 Million Every Hour: Report

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.

Comments

[Y3rMawm]

12:43 AM on 12/06/2011

Americans Prevent $11.6 Million In Theft Every Hour"

There, fixed the headline. Capital formation MUST precede any taxation. Without capital formation, there is nothing to tax.

[No-name-plz]

07:08 PM on 10/20/2011

The national expense/debt is currently 3 million per minute. Taxing the rich will pay for 12 minutes.

[Kurfco]

09:30 PM on 10/19/2011

Here we go again. Every dollar not taken in taxes is "costing the Treasury". Think about the logic of this. It's like the old joke about the "Simplified 1040" that asks how much you make on one line, then tells you to send it in on the next. Money not taken in taxes doesn't "cost Treasury" anything unless you start from the perspective that they are entitled to all but what they DON'T take.

[mirage motorcars]

01:19 PM on 10/18/2011

This is pretty hillarious.Tax cuts cost America 11.6 million per hour? How? Let me give you an example of "Government math", Say that in Janurary you decide that by the end of the year you are going to buy a new Mercedes. The car will cost you $100,000.00. By september you realize that you haven't done as well as you thought so you decide to by a less expensive car. It will cost you $40,000.00. Here is the way the Fed. would deal with this issue." WOW we just got $60,000 to spend!! We were gonna spend 100 thousand but we only spent 40, that means we have 60 grand to spend!!!" NO!! You didn't have the 100 grand in the first place!! "But look we were gonna spend 100 thousand but we didn't so we have this surplus of money". The fact that the Government never had the money to start with is the key point here. Tax cut's for the wealthy don't actually cost the Government ANYTHING because the money wasn't there to begin with. The other problem here is that the Government has FORGOTTEN whose money it is in the first place....IT AIN"T THEIRS!!! It's TAXPAYER money...It's OUR money NOT theirs!!!

[SC100]

08:47 PM on 12/05/2011

It does make a whole lot of sense actually. Lower tax rates reduces tax receipts. The "net effect" is indeed like an expense, or added cost.

[Haus]

04:40 PM on 10/17/2011

Tax cuts on the other 99% cost the government a lot more revenue. Those should be raised also.

[Butquestioning]

05:08 PM on 10/17/2011

The top 50% of our people make 97.5% of all income. The bottom 50% makes only 2.4% of all income. So, how much should we expect from the bottom 50% in taxes?

I agree that taxes need to be raised and that could include the top 50% of our workers but when we have the kind of disparity in wealth and income that we see today, it is only fair that we take the taxes where they have excess capacity to pay. the top earners essentially would reduce the amount they save or invest. The bottom 50% would have to reduce their living expenses - since they spend almost 100% of their income on just costs to survive.

[YoureWrongAgain]

11:05 AM on 10/18/2011

Thats totally bogus. IRS tax stats prove your comment in 100% incorrect

[sb1285n]

02:58 PM on 10/17/2011

(continued from previous post)

You can argue that the 90s were prosperous while taxes were low, and you'd be right, but that was a fake prosperity. People were living beyond their means because wages weren't keeping up with inflation, pair that with a society that promotes excess and you can see how we got into the mess we are in today.

What I am trying to say is that trickle down economics doesn't work, it never has. The government continues to push this failed system because they are either business men themselves or they are being funded by one.

Stop being fed misinformation by politicians who don't have your best interest at heart! Most of us (even the upper class) will not be affected by an increase in the top marginal tax rate.

Only a strong and stable middle class will help our country grow again. Building up the wealthy while the middle class is so weak will only cause this country to collapse in on itself.

[sb1285n]

02:57 PM on 10/17/2011

Guys why are we arguing semantics?

Its a plain and simple fact: Reagan's economic plan did not work. The fact that we continue to implement this failed system is ridiculous.

When Reagan went into office the top marginal tax rate was at 70%, today it's at 35%

His logic was if you lowered taxes on the wealthy they'd be encouraged to invest. Unfortunately Reagan and Co. never took into account human greed. Yes the wealthy invested, but they invested to benefit themselves and not for the good of the country. Being a good citizen and doing the right thing is not profitable.

Between 1950 and 1980 the average salary increased by 75%
Between 1980 and 2011 the average salary increased by 1%
Between 1980 and 2011 the average salary of the top 1% has doubled.

If you don't think that the top marginal tax rate and the state of the economy are connected then consider this.

In 1917 the top marginal tax rate was 77%
At the start of the great depression the tax rate was at 24%
By the end of the depression the tax rate was at 67%

Still don't believe me?

During the 1950s, one of the most prosperous times in our countries history, the top marginal tax rate was at 91% (oh and a republican was in office)

Americans' got paid the highest wages in the world, the dollar was strong, the middle class was evens stronger and we had a surplus.

(continues on next post)

[S M V]

12:35 PM on 10/17/2011

Yes think about all the money that the IRS is missing out on when they don't tax everyone at 100%.

Article and thought process behind it makes zero sense. If you want the current tax process to be more progressive then say that. To claim that having lower tax rates cost money is nonsense. It's like claiming tax cuts as spending.

[AdamWest1313]

01:29 PM on 10/17/2011

The logic is simple: The government has a set amount of income for a current tax rate. When you pass tax cuts, that cuts off that amount of income. 11.6 million per hour is the income lost that the government should normally be getting from the tax rate.

[S M V]

01:46 PM on 10/17/2011

The assumption behind the statement is that they have a right to that money and they are forgoing that right. If a gang member does not kill you have they given you life? Or if a robber leaves you cab fare has he losses income?

If the article had said the current tax rates allow people to keep "X" amount more of their money then I would have no problem with it.

[Phil Meiklejohn]

05:41 PM on 10/17/2011

Also assumes that there are no benefits to economic growth from the tax cuts

[Butquestioning]

03:44 PM on 10/17/2011

No one is saying that tax rates should be at 100%...that is rediculous. But by the same token, our debt is a combination of spending and revenue. If you reduce revenue with tax cuts, the debt is increased. It is simple accounting.

[Haus]

04:41 PM on 10/17/2011

Lower spending. Problem solved.

[S M V]

06:08 PM on 10/17/2011

I understand the math. It is the tone of the article I object to. Too many people feel that politicians have the right to other people's money. Taxes should truly be used only for the common good and the tax base should be as wide as possible.

[spiderbucket]

12:21 PM on 10/17/2011

My boss writes off every possible "expense" - including newspapers. Every meal is written off as a business expense. Yet when me and my co-workers go to lunch together - we always talk shop - but we dare not expense those meals for fear of an IRS audit. I don't think my boss is doing anything illegal but it certainly is not fair. Business expenses should not include first class airfare, limos, and 5 star meals.

[xrepublican]

12:33 PM on 10/17/2011

One of the current owners at dw's company - worth > $100 million puts company tabs for major meetings on his PERSONAL credit card (gets reimbursed of course) to get the points....... adds up really fast.

Before the founder died he let the peons do this - so they got some benefit. But his guy is milking it for all he can. The company is setting up an office in CT where HE lives just for him and his secretary so he won't have to pay as much in NY state tax. I think the office costs will be higher than his tax difference (but the company will pay THAT). Another reason to tax the hell out of inherited wealth.

[Phil Meiklejohn]

05:42 PM on 10/17/2011

So because your boss was a jac*as$ you feel we need to punish everyone else who has worked to make more than you?

[Y3rMawm]

12:50 AM on 12/06/2011

Perhaps you should declare yourself a corporation, and sell your services to your former employer. It is the tax code (the government) that allows those deductions/write-offs.

Government has widened the goal posts. Any business would be bankrupt tomorrow if they play the game using the old goal posts.

[Rogelio Lopez]

12:19 PM on 10/17/2011

but if those rich people didn't receive huge tax breaks, hundreds of over dressed wine pourers and butlers would be out of work.....oh, the humanity.....

[Butquestioning]

03:51 PM on 10/17/2011

So, do you think that because they have gotten the tax cuts they are spending more or giving those wine pourers and butlers more business or tips...not likely. It just adds to their investments - things like Treasury Notes that they buy because the economy has to sell them to cover the tax cuts...so they get to get interest on the tax cuts they receive and invest...

[Phil Meiklejohn]

05:44 PM on 10/17/2011

Oh no investments no say it isnt so. You mean like the ones I am looking for currently to start a business and hire people. You clearly don't even have a basic understanding of economics.

[Jim NLN]

12:00 PM on 10/17/2011

You know who's fault this is...........CLINTONS!

[LickMyDecalsOffBaby]

10:28 PM on 10/16/2011

...and the middle class gets to take up the slack...

[AG creative]

10:19 PM on 10/16/2011

That's $3222 a second.

[Eagleman]

09:26 PM on 10/16/2011

Why don't we nationalize their assets and spread the wealth ?

[BBackSoon]

12:03 PM on 10/17/2011

So almost everyone agrees that another 5% would be reasonable, or even simplify the tax code and get them to pay 20% across the board, and you have to say something about taking all their money?

Go peddle your fish someplace else.

[Eagleman]

01:33 PM on 10/17/2011

Today 5% reasonable to pay for the lazy bums in the government

In a year it will become 10% and then 15 and in the end we take it all....

Why can't we save the cancerous confiscation and do it in one go... ?

[mmike1969]

08:28 PM on 10/16/2011

And this shocks anyone because??
Who exactly does this surprises? T-baggers/gross old pigs maybe since they like to live in their bubble?