Don Nickles: “I have heard many people say the tax cut is really weighted towards the upper income people, and sometimes I do not know…”

“I have heard many people say the tax cut is really weighted towards the upper income people, and sometimes I do not know if we are talking about the 2001 tax cut or the tax cut that President Bush is now proposing for growth or the extenuation of the 2001 tax cut. In his total 10-year budget, the President had about $1.5 trillion of reduced revenues. Of that, $695 billion, I believe, was in the growth package and tax cuts; about $30 billion in expenditures. Some of the tax cuts were refundable, so Government will write a check. So that goes on the expensing side. About $600 billion of that figure is the extension of the 2001 tax cuts that will sunset at the end of the year 2010. Those are tax cuts that are the per-child tax credit, the marriage penalty, and also the reduction in rates. I might mention the reduction in rates, what we already passed in 2001, particularly as far as income strata is concerned, who benefited the most percentage-wise, low income benefited a much greater percentage than upper income. Those are the facts. We reduced the 15-percent bracket to 10 percent, and we did it retroactive in June of 2001. We made it retroactive to January of 2001. Now, that is a reduction of rates of about 30-some-odd percent. That is from 15 percent to 10 percent, and it was made retroactive for individuals who were in that income tax bracket. For individuals who were at the maximum tax bracket, we went from 39.6 percent to 38.6, 1 percentage point.”