During a discussion of the new estimated U.S. budget deficit on the July 11 edition of PBS' The NewsHour with Jim Lehrer, Wall Street Journal editorial board member Stephen Moore asserted that “a lot of the new [tax] revenue is coming from rich people,” and then asked rhetorically, “if [Bush's tax cut] was a big tax cut for the rich, why are the rich paying more taxes than ever?” In fact, filers earning at least $200,000 paid less federal income tax in 2004 on average than they did in 2002. It is true that the total share of income tax paid by those making more than $200,000 increased between 2002 and 2004, but that is not because wealthy taxpayers individually paid more. While taxes as a percentage of income went down in that bracket, the number of taxpayers in the bracket increased during that time period, as did the average income of those within that bracket. Those making more than $200,000 saw their incomes increase 7 percent between 2002 and 2004, while average decreases in their income tax ranged from nearly 9 percent for those making between $200,000 and $500,000 to more than 19 percent for those with incomes of more than $10 million.

Media Matters has previously debunked a similar claim made by Moore in a May 4 Journal op-ed. Moore had selectively cited Internal Revenue Service (IRS) statistics in order to buttress his assertion that "[i]n the aftermath of the Bush investment tax cuts, the federal income tax burden has substantially shifted onto the backs of the wealthy."

The Bush tax cuts lowered the top two tax brackets from 35 percent and 38.6 percent in 2002 to 33 and 35 percent, respectively, in 2004. And according to the most recent IRS data, the number of those taxpayers earning more than $200,000 increased by nearly 600,000 from tax years 2002 to 2004. The same data also show that the combined adjusted gross income of those who filed tax returns making more than $200,000 a year rose by more than $420 billion throughout the same time period with the average income of those with incomes more than $200,000 rising from about $518,000 per filer in 2002 to about $559,000 in 2004, a 7 percent increase. Simultaneously, the average tax paid by those making more $200,000 a year declined significantly, as the table below illustrates:

Average tax (whole dollars)

Adjusted gross income

2002

2003

2004 [p]

% Decrease

$200,000 under $500,000

$ 65,452

$ 60,453

$ 59,801

-8.63%

$500,000 under $1,000,000

$ 188,463

$ 169,166

$ 166,196

-11.81%

$1,000,000 under $1,500,000

$ 352,318

$ 313,177

$ 303,304

-13.91%

$1,500,000 under $2,000,000

$ 508,213

$ 450,683

$ 437,490

-13.92%

$2,000,000 under $5,000,000

$ 876,541

$ 765,117

$ 753,371

-14.05%

$5,000,000 under $10,000,000

$ 2,003,435

$ 1,730,613

$ 1,696,738

-15.31%

$10,000,000 or more

$ 6,370,481

$ 5,792,690

$ 5,129,136

-19.49%

[p] = preliminary

An April 5 New York Times analysis noted that IRS data through 2003, the first year with complete IRS data following Bush's tax cuts, taxes on incomes of $10 million or more decreased by an average of approximately $500,000. In addition, in a June 5, 2005, article titled “Richest Are Leaving Even the Rich Far Behind,” the Times presented its analysis of the tax burden in the United States and found that:

• Under the Bush tax cuts, the 400 taxpayers with the highest incomes -- a minimum of $87 million in 2000, the last year for which the government will release such data -- now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.
• Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000.

From the July 11 edition of PBS' The NewsHour with Jim Lehrer, during a panel discussion also featuring senior correspondent Ray Suarez and University of California-Berkeley professor and former Clinton Secretary of Labor Robert Reich:

SUAREZ: Well, Stephen Moore, taking Professor Reich's point, is there something changing about how the American government collects the money it needs? A lot of this new revenue is coming from corporate taxes, and a smaller overall share is coming from the taxes that individual workers and wage-earners pay on the money they make.

MOORE: Well, actually, the big picture to me, Ray, as I look at this data, is that, when you see where the new revenue is coming from, a lot of the new revenue is coming from rich people, from people in the top one, or top five, or top 10 percent of earners in America. They're the ones that are largely paying these capital gains and dividend tax cuts, which calls into question, if this was a big tax cut for the rich, why are the rich paying more taxes than ever?