In a finding that could undermine President Bush’s plan to cut capital gains taxes, a House committee report said today that during the 1980s, the rich paid lower taxes on more income, while the poor felt a sharper tax bite.
The report, based on Congressional Budget Office and other agency studies, is to be released Tuesday by the House Ways and Means Committee at a hearing where Treasury Secretary Nicholas F. Brady and White House Budget Director Richard G. Darman are scheduled to testify.
The report shows that the effective tax rate for the poorest 20% of American families rose 16.1% during the 1980s while real income rose 3.2%.
During the same period, it says, the effective tax rate for the richest 20% of families dropped 5.5% while their real income rose 31.7%.
That statistic and others in the report could add fuel to Democratic claims that wealthier Americans, who would benefit most from a capital gains tax cut, do not need or deserve another tax break.