[Fwd: CBPP: Bush Uses Misleading "Average" Figure Once More]

This is forwarded to you from M.S.

--- Begin Message ---

Title: CBPP: Bush Uses Misleading "Average" Figure Once More

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CENTER ON BUDGET AND POLICY PRIORITIES UPDATE
Thursday, February 20, 2003
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"There He Goes Again!"

Center on Budget and Policy Priorities Responds to President's Misleading Use of Averages

In remarks today in Atlanta, President Bush repeated eye-catching but misleading average figures to promote his economic plan.

President Bush said: "Under this plan, 92 million Americans receive an average tax cut of $1,083. That's fair."

This statement is misleading because the average is skewed upward by the very large tax cuts that would go to a small number of high-income taxpayers....Data from the Urban Institute-Brookings Institution Tax Policy Center show that 80 percent of tax filers would receive less than the $1,083 "average" amount, while about half of tax filers would receive $100 or less.  The White House produced the $1,083 average figure by averaging together high-income people who would get massive tax cuts — the average tax cut would be $90,000 for people who make more than $1 million per year — with the much larger number of Americans who would get small tax cuts.

Thus, while $1,083 may be the average tax cut amount, it does not accurately reflect what an "average" American would receive.  The Tax Policy Center data show that the average tax cut for those in the middle fifth of the income spectrum would be $256.

For further discussion, please see: "Administration's Use of 'Average' Tax Cut Figures Creates Misleading Impression About the Tax Cuts Most Households Would Receive" at <http://www.cbpp.org/1-9-03tax.htm>.

President Bush said: "We estimate that 23 million small business owners across America will receive an average income tax rate cut of $2,042. That matters."

This statement, as well, reflects a misleading use of averages.  The Urban-Brookings Tax Policy Center data show that 79 percent of returns with small business income would receive less than this $2,042 "average" amount and that 52 percent would get less than $500.  The average is skewed by a small number of high-income returns with small business income who are getting very large tax cuts.

In addition, the Administration uses a definition of "small business owner" which includes a substantial number of wealthy investors who don't actually run small businesses but simply have passive investments in them.  For example, President Bush and Vice President Cheney count as "small business owners" under this definition.  Defining "small business owner" in this way pumps up the average tax cut that small business owners are said to receive.

For further discussion, see: "President's Radio Address and Other Administration Statements Exaggerate Tax Plan's Impact on Small Businesses" at <http://www.cbpp.org/1-18-03tax.htm>.

Michelle Bazie
Deputy Director of Communications
Center on Budget and Policy Priorities
820 First Street, NE, Suite 510
Washington, DC  20002
Voice: 202-408-1080
Fax: 202-408-1056
http://www.cbpp.org
bazie@cbpp.org

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
View job opportunities at the Center:
http://www.cbpp.org/jobs.html.

You are receiving this message because you have signed up to the free e-mail notification service of the Center on Budget and Policy Priorities.  If you wish to unsubscribe or change the e-mail address to which these notices are transmitted, send a message to bazie@cbpp.org.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

--- End Message ---