As President Bush and Congress hammer out a stimulus package to boost the slowing economy, “Today” show host Matt Lauer is working hard to ensure that the biggest contributors to the nation’s tax base won’t benefit.
“Mr. Bernanke said in his press conference yesterday that you’ll get the most bang for the buck if you get this money, these tax rebates, into the hands of lower and middle class people,” Lauer said during an interview with Treasury Secretary Henry Paulson. “They’re going to be the ones who in the short term will go out and spend it and boost the economy. Is that where the rebates will go?”
Lauer was referring to plans by Bush and Congress to craft a stimulus package that will likely include tax rebates similar to the ones issued in 2001. Those checks, for $300, were sent to Americans with the hopes they would spend the money for a quick injection of cash into the economy.
Neither Bush nor Congressional leaders have outlined specific plans, although it is widely reported that Bush and Republicans support personal tax rebates and corporate tax cuts, while Democrats who control Congress support increased spending on unemployment benefits and food stamps.
Paulson told Lauer, “A big part of the program, Matt, should be focused on consumers, on individuals, on families, getting money to them because they will spend it.” But his answer wasn’t good enough for Lauer, who seemed to be looking for a more direct promise that the wealthy wouldn’t benefit.
“All right, but you’re not going to give rebates to the rich here, correct?” he asked.
Paulson wouldn’t jump on Lauer’s anti-rich bandwagon, though. “I don’t want to get ahead of the president here. But again remember the president is going to be putting forward a broad outline, principles, ideas and because he wants to work on a collaborative basis with Congress,” he said.
What Lauer unsurprisingly failed to mention is how high the tax burden is on wealthier Americans, or how much more, in relative terms, a tax rebate would benefit lower- or middle-income families than it would wealthier families.
According to Internal Revenue Service statistics from 2005 [1], the bottom 50 percent of taxpayers, who account for 12 percent of the income share, contribute only 3.07 percent of the tax revenue.
The wealthiest 10 percent of taxpayers, who account for 46.44 percent of the income share, are responsible for 70.3 percent of the government’s personal income tax revenue.
The richest of the rich, the top 1 percent of earners accounting for 21.2 percent of the income share, contribute 39.38 percent of the income tax revenues – that’s 13 times as much revenue as the entire lower half of taxpayers.