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There's more to Bush tax cuts than $100,000 for millionaires

The statement

Extending current tax rates would "average more than $100,000 a year to millionaires and even billionaires."

Austan Goolsbee, Sept. 12on ABC's This Week with Christiane Amanpour

The ruling

Bush-era tax cuts are set to expire at the end of 2010 if Congress doesn't take action, and the debate over extending them has become one of the most pressing policy issues of the year.

President Barack Obama wants to see the tax cuts made permanent for individuals making less than $200,000 a year and couples who make less than $250,000 a year. Tax rates would go up for people who make more.

Austan Goolsbee, the president's new chair of the Council of Economic Advisers, defended that position on ABC's This Week. Obama has been "quite clear," he said, "that borrowing $700 billion to extend tax cuts that average more than $100,000 a year to millionaires and even billionaires is the least effective bang for the buck we have."

We decided to check Goolsbee's assertion that if wealthy taxpayers get to keep their tax break, it means an average of "more than $100,000 a year to millionaires and even billionaires."

The White House pointed to data from the Joint Committee on Taxation, a nonpartisan committee with a professional staff of economists, attorneys and accountants who do research on taxes.

The JCT estimated what tax revenues would be if the cuts expire and how many taxpayers would be affected. They found that for those who have an income of $1 million or more, extending the Bush tax cuts would mean the government would not collect $32.7 billion. That amount would apply to about 315,000 taxpayers. Divide lost revenue by the number of filers, and you get $103,809, or just over $100,000, as Goolsbee said.

At the conservative Heritage Foundation, J.D. Foster said he didn't argue with the numbers, but instead took issue with Goolsbee's focus on millionaires. He pointed out that many people who make more than $200,000 or $250,000 are not millionaires and that if the cuts expire, those people will see a tax increase as well.

That's a fair point. The JCT found that for those making between $500,000 and $1 million, the tax cuts were worth an average $17,467. For those who make between $200,000 and $500,000, the lower rates were worth $7,152 per tax filer.

Goolsbee is right about the expiring tax cuts being worth, on average, more than $100,000 for millionaires and billionaires. But the proposal would let tax cuts expire for some who aren't millionaires. So we deduct a tick from the Truth-O-Meter and rate his claim Mostly True.

Edited for print. For more go to

There's more to Bush tax cuts than $100,000 for millionaires 09/16/10 [Last modified: Thursday, September 16, 2010 9:36pm]
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