Jeb Bush explains why "broad-based" tax cuts are bad policy
Matthew Martin 9/27/2015 02:08:00 PM
"Of course, tax cuts for everybody is going to generate more for people that are paying a lot more. I mean that's just the way it is."I've been explaining this fact to anyone who would listen for a long time. I even made this calculator to help visualize it. Any tax cut in any tax bracket necessarily gives more to the rich than to anyone else. This is even true when we cut the lowest marginal tax rate: the rich also pay taxes on income in that bracket, so they will receive the largest reduction of anyone from a reduction in the tax on that bracket.
Ok, obviously Bush was trying to defend rather than criticize his own "broad-based" tax cut plan. But in doing so he highlights how ridiculous it is. If you really wanted an across-the-board tax cut that benefits everyone equally, the only way you can pull that off is by tying any cut with an offsetting increase in the top marginal tax rates, so that the disproportionately large reduction in taxes the rich get on their first $400,000 of their income is made up by an offsetting increase on their income over $400,000.
I mean, that's just the way it is.