Are Tax Cuts Unfair?

Congress continues to debate whether to extend the 2001 and 2003 tax cuts, to allow taxes to go up on everyone, or to raise taxes on just “the rich.”  Contrary to common conception, nearly eveyone received a tax cut, and is scheduled to see their income tax rate rise.

A video created for the Commonwealth Foundation’s Please No More Taxes Contest explains the ‘unfair’ argument of tax cuts perfectly.  Due to the highly progressive nature of our tax structure, spending cuts and therefore tax reductions benefit those who pay the most taxes. 

Indeed, as the video shows—using soda instead of taxes—those that paid the most did the highest share of the “cut.”  Yet those who paid less actually saw a higher proportion of their own costs reduced.

Enjoy the video.