POLITICS

House Dems Supporting Bush Tax Cuts Represent Few Rich People: Report

Most House Democrats who want to keep the soon-to-expire Bush tax cuts for the wealthy represent districts where the share of taxpayers rich enough to pay higher taxes under President Obama's tax plan is below the national average.

Obama wants to keep the cuts for all but the top income brackets -- individuals and families making more than $200,000 and $250,000 a year, respectively. Of 31 Democrats who signed a letter supporting the tax cuts, 22 represent districts where less than 2.1 percent of residents would see higher taxes under Obama's proposal, according to a new report by Citizens for Tax Justice.

"They don't seem to be coming from particularly rich districts, so it makes you wonder, 'Who are they representing?'" said CTJ's Steve Wamhoff in an interview with HuffPost. "Why are they doing this? The polls are against them. It's not poll-driven. It's not in the interest of their constituents. It's baffling."

Supporters of the tax cuts have said they're just looking out for the economy. "Given the continued fragility of our economy and slow pace of recovery, we share their concerns," wrote the 31 Democrats in their letter. "While those in the highest income brackets comprise only two to three percent of American taxpayers, economists estimate that they are responsible for 25 percent of national consumer spending."

The CTJ report takes aim at the 25 percent claim: "This assertion is not only wrong; it is impossible. The richest 2.1 percent of taxpayers account for about 21 percent of total pretax cash income. But their share of total personal consumption is certainly not higher than their share of total income. In fact, it is considerably lower, because they save a much higher portion of their after-tax income than less well-off Americans."

Many of the House Democrats who support extending the tax cuts, all of which will expire after December if Congress does nothing, opposed reauthorizing extended unemployment benefits back in May, when they said the economy was too strong to justify adding to the deficit. HuffPost asked one such Tax Cut Democrat about the apparent contradiction over deficit spending, since the cuts would add billions to the deficit.

"The economy was growing at the end of December 5.6 percent. It's now growing at 1.6 percent," said Rep. Gerry Connolly of Virginia (who supports the cuts but has not signed the letter). "Many economists say that if you raise taxes on the upper-income brackets, it will shave half a point off of GDP."