Edwards Ad Stretches Truth with Claim About Multimillionaires' Taxes
December 5, 2003
Updated: December 9, 2003
Do they really pay a lower tax rate than teachers or cops? Hardly ever.
John Edwards’ latest TV ad leaves the impression that multimillionaires pay lower tax rates than salaried government workers or secretaries. While that can be true sometimes it is not usually the case. In fact, the most affluent still pay significantly higher rates even after the two Bush tax cuts.
In an earlier ad Edwards falsely claimed that taxes have been going up for non-millionaires, when in fact they have been going down for virtually everybody who earns enough to pay any income tax at all. So in this ad Edwards continues a pattern of denouncing fictional grievances.
The latest ad, named "pool," began airing in
Asked to back up that statement, the Edwards campaign cited hypothetical examples of a multimillionaire "executive" who would pay only a 15% capital-gains rate on profits from sale of stock, or idle heirs who “will pay only 15% of their income in taxes” if they don’t work and get all their income from capital gains and certain kinds of dividends. But those are misleading cases. The executive’s overall tax rate would be much higher than 15% due to taxes on salary and other income, for example.
Wealthy taxpayers did get huge benefits from the Bush tax cuts, but on average they still pay far higher rates than middle-income salaried workers. Estimates by the
This tables shows the average tax rates paid by households in various income groups, both before Bush took office and after the two Bush tax cuts become fully effective in 2006:
Table 5.23 "Combined Effect of EGTRRA and Conference Agreement on Jobs and Growth Tax Relief Reconciliation Act of 2003: Distribution of Income by AGI class, 2006," Tax Policy Center (Washington DC) 23 May 2003
Notes: The analysis was prepared as the second Bush tax cut had taken final form in Congress and was nearing passage. The table shows the combined effect of “EGTRAA” -- which was the first Bush tax cut passed in 2001 and officially the Economic Growth and Tax Relief Reconciliation Act of 2001, and the “Conference Agreement,” the House-Senate compromised that later passed and was signed into law by the President. The tables show the effects on “tax units” (families and singles living independently) at various levels of “AGI,” which refers to "Adjusted Gross Income" as reported by tax filers to the Internal Revenue Service.
His ad says "Millionaires' taxes keep going down while yours go up." But in fact, federal income taxes have gone down for everybody who paid any
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