Grassley Digs His Hole Deeper


Let me assure you that I hardly consume any alcohol - that is, if you don't count the contents of the wine and beer I drink. Similarly, the Bush tax cut isn't all that tilted toward the rich - that is, if you don't count the parts of it that are most tilted toward the rich.

In today's Times Charles Grassley defends himself with a letter pointing out that only 27 percent of the income tax cuts in last year's bill go the the top one percent. Key word: INCOME. That is, he's left out the estate tax, which is more than 20 percent of the total, and mostly goes to, yes, the top one percent. So his numbers aren't a refutation: they're a confirmation. Include the piece he has carefully left out, and you're talking well over 40 percent of the tax cut to the top 1 percent.

Is this misdirection deliberate? Of course it is. Remember what I said in the original column: when advocates of the tax cut are pressed to answer the question, "How much of the tax cut goes to the top percentile?", they always insist on answering some other question. Grassley just did it again.

For reference: the top percentile receives about 17 percent of income, pays about 25 percent of federal taxes (Grassley, of course, only counts income taxes), and receives, let's say, 45 percent of the tax cut.

Originally published on the Official Paul Krugman Page, 10.25.02