Most Americans Would Only Get $20 From Tax Cut

May 11, 2006 — -- The Dow Jones is up, unemployment is down, and the economy is booming.

Middle-income Americans, however, may still feel the crunch -- especially as interest rates rise. They'll see little help from the $70 billion tax cut the Senate is expected to pass.

Remember a few summers ago when we all got checks in the mail from Uncle Sam after the first Bush tax cuts? The bill moving through Congress this week extends those tax cuts for a couple more years, giving tax breaks for investors and helping about 15 million Americans avoid something called the alternative minimum tax.

The Tax Policy Center, a Washington think tank, discovered that the top 0.1 percent of taxpayers -- the people who make more than $1.8 million -- would get back $82,000. Middle-income Americans making between $27,000 and $47,000 would get $20.

"This is another series of tax cuts for rich people. The vast majority of the benefits goes to people earning over a hundred thousand dollars a year," said Len Burman, director of the Tax Policy Center.

Republicans in Congress defended this tax cut, saying the robust economy was partly thanks to the cuts passed three years ago.

"The American economy has surged because of the Republican tax relief," said Speaker of the House Dennis Hastert, R-Ill.

There's also a move in Congress to pass a second tax cut soon, so middle-income Americans may eventually get a little more than $20. That's little comfort right now to those struggling to make payments on their homes because of rising interest rates.