According to the GeorgeWBush.com, Senator Kerry is now proposing increasing taxes on taxpayers making more than $143,000, rather than only those making over $200,000:
But John Kerry’s claims on tax increases are already beginning to slip – Kerry’s campaign now reveals that his tax increase for those earning $200,000 would include people earning as little as $147,000. In another new attempt to add up his numbers last week, a document issued by Kerry’s campaign revealed that he would “restore top two rates” for individual income taxes. The second highest tax rate is applied to singles earning $147,000 and couples earning $179,000. (Source: “The Kerry-Edwards Plan to Keep Spending in Check While Investing in Priorities and Cutting Wasteful Spending,” 8/3/04) [PDF link]
The Bush folks are using this data, which shows that the top two rates apply for incomes above $146,750. But although the Kerry document states “Restore top two rates,” it doesn’t state that Kerry/Edwards will do so for taxpayers earning less than $200,000. In speeches and documents posted on his web site, Kerry has been adamant about his plan not to raise taxes on those making less than $200,000. That the second highest rate now starts with those earning $146,750 is not set in stone (or a 2.6 ton granite monument.) Yet the Bush web site makes this simplifying assumption in order to brand Kerry a liar when there is no proof that this is the case.
So how could we settle this? One way is to look at how much Kerry’s tax proposals will raise. The document quoted by the Bushies says $337bn over a 10-year period, so let’s say $34bn/year. According to the IRS (Excel file,) there were 2,771,579 tax returns in 2002 that showed an adjusted gross income of more than $200,000. The amount of federal taxes paid by these fine individuals totaled $323.6bn.
Kerry proposes restoring the top 2 rates (33% and 35%) to pre-Bush levels, 36% and 39.6%. The increase in the tax rate would be slightly more than 10%. Doing only back of the envelope calculations, we see that 10% more in taxes paid of $323.6bn is $32bn/year. And how much did Kerry say his proposal would raise? $33.7bn/year.
Gee, we wonder who’s lying?
PS: IRS data lumps tax returns for those making between $100,000 and $200,000 together. Taxes paid totaled $175bn for that group. Any meaningful share of additional tax revenue from them would, in all likelihood, greatly exceed the revenue projections from Kerry/Edwards.
(GeorgeWBush link via EconoPundit.) [Fixed some typos in the last paragraph.]
Added: In the comments, Dan Bock and anon point out that our math is flawed since we failed to account for the income taxed paid on pre-$200,000 income. There’s no debating the point of course — but given that we’re talking about a 10-year span (you know, with inflation and increasing incomes and so on,) let’s see instead what Bush and others have estimated to be the revenue lost because of the Bush tax cuts enacted for the top 5% of Americans. Let’s start with Citizens for Tax Justice: In 2010, the top 5% of Americans will save $82bn thanks to the cut in income taxes.
We’ll add more links later — just wanted to put this one up to get things started.
More estimates of the cost of the Bush tax cuts in this PDF file. The benefit of repealing the tax cuts, lest we forget, is not only in additional revenue but also reduced debt (and interest payments.)