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    Texans compare numbers in tax-cut debate plan

    BY Gary Susswein
    04/13/2001

    As President Bush's $1.6 trillion tax-cut proposals work their way through Congress, Texans remain at odds over who exactly would benefit from the plans.

    A study co-written by the Austin-based Center for Public Policy Priorities found that nearly one-fourth of Texans would receive no benefit from Bush's proposed income-tax reductions.

    It also found that the wealthiest 1 percent of Texans would each save $66,000 a year, while the poorest 20 percent would save $71 each. A taxpayer earning the state's median income -- about $32,500 a year, according to the report-- would save $578 a year.

    "A Texan at the bottom of the income scale would get enough back to buy maybe a new pair of Levi's and Wrangler's," said Center for Public Policy Priorities spokesman Chris Pieper. "The heavy bias in this plan toward the already wealthy should raise serious concerns here in the Lone Star State."

    But those numbers appear out of step with examples cited by Gov. Rick Perry at a news conference this week. Perry said a family that earns $38,000 a year would save $1,600 in taxes, and the average Texas teacher making $34,000 would save $1,500.

    "Bush's tax-cut proposal would provide significant relief to real Texas families," Peggy Venable of Citizens for a Sound Economy said at the Perry news conference. "This isn't a tax cut for the rich. It's a tax cut for everybody."

    The analyst whose numbers suggest otherwise doesn't dispute that some teachers and some families making from $30,000 to $40,000 a year could see large tax breaks.

    But he said those are isolated examples.

    "Not everyone making $34,000 is a family with two kids (which gets a larger break). Some are single people; some are couples with no children; some are elderly people," said Bob McIntyre, director of the Washington-based Citizens for Tax Justice, which co-wrote the Center for Public Policy Priorities report. "If you focus on the right people, you can get the answers they want. But if everyone was like that, the plan wouldn't cost $1.6 trillion. It would cost $5 trillion."

    Bush has proposed consolidating federal income-tax brackets, reducing each tax rate and eliminating the so-called marriage penalty and the inheritance taxes.

    Texas ranks 22nd in the amount that would be saved by a resident earning the median income, the report found. Tax savings are affected in other states by state income taxes, McIntyre said.

    You may contact Gary Susswein at gsusswein@statesman.com or (512) 445-3654.

    by Gary Susswein on 4/13/01.