Center for American Progress Action

RELEASE: CAP Action Analysis: Bush Family’s Favor to the Wealthy Few Leaves Working Americans with the Bill
Press Release

RELEASE: CAP Action Analysis: Bush Family’s Favor to the Wealthy Few Leaves Working Americans with the Bill

Similar to the policies of his brother George W., Jeb Bush’s tax plan would line the pockets of the wealthiest Americans but probably not boost the economy.

Washington, D.C. — Doubling down on his brother’s trickle-down economic and tax policies, former Florida Gov. Jeb Bush (R) released a tax plan yesterday that would be a windfall for the wealthiest Americans. Moreover, it is unlikely to grow the economy as Bush claims and would leave working Americans and future generations footing the bill. An analysis from the Center for American Progress Action Fund shows that Bush’s proposed tax cuts could exacerbate rising economic inequality, with cuts to the corporate tax rate, capital gains and dividends, and the top tax rates largely benefiting millionaires and billionaires, while Bush’s own economists admit it will add trillions to the federal deficit. Similar to his fellow 2016 GOP presidential candidates, Bush has largely shifted his rhetoric about the economy to focus on helping the middle class, but his policies reflect a far different reality.

“Americans have already seen how this movie ends—in the Great Recession and an economy that is still in recovery several years later,” said Ryan Erickson, Associate Director of Economic Campaigns at the Center for American Progress Action Fund. “Jeb Bush’s tax plan would give the wealthiest Americans an huge boost, while the rest of us are stuck paying the tab. Trickle-down economics is a failed theory that has led to growing income inequality and wage stagnation, and it is time we focused on ensuring that the economy works for everyone, not just the wealthy few.”

Gov. Bush’s plan would lead to massive tax giveaways to the wealthiest by:

  • Cutting the top tax rates for the wealthy few: Under the Bush plan, the top income tax
    rate would be capped at 28 percent, or nearly a one-third drop from the 39.6 percent top rate in the law now. Cutting top tax rates would mean a huge tax windfall for the wealthiest taxpayers—which could exacerbate rising economic inequality while doing nothing to spur economic growth.
  • Slashing the corporate tax rate and other corporate taxes: Based on analysis by the Congressional Budget Office, the top 20 percent of income earners effectively pay 78.6 percent of the country’s corporate taxes, while the bottom 80 percent of households pay the remaining 21.4 percent. Nearly half of the corporate tax burden—48.7 percent—falls on the top 1 percent of households alone. Since owners of corporations pay most of the tax and since corporate ownership is concentrated among high-income households, cutting taxes on corporations would be a very large giveaway to the wealthy while doing very little for the middle class.
  • Lowering tax rates on capital gains and dividends: Income from capital gains and dividends goes overwhelmingly to the wealthy: The 400 richest taxpayers alone receive 12 percent of all capital gains income and eight percent of all dividend income. As shown in a recent Center for American Progress report, a lower tax rate on dividends and capital gains is one of the ways the U.S. tax code helps those who are wealthy enough to own capital accumulate even more wealth, further worsening income inequality.

“The rationale for the Bush tax cuts—that the economy will grow and the benefits will trickle down to the middle class—have been repeatedly debunked by economics and experience,” said Brendan Duke, Policy Analyst at the Center for American Project Action Fund. “Bush’s tax plan shows yet again that his priority is another gift to the wealthiest Americans, while leaving everyone else to foot the bill.”

For more information on this topic or to speak with an expert, contact Benton Strong at [email protected] or 202.481.8142.