Home > Uncategorized > Bush Tax Cuts – What the argument is really about.

Bush Tax Cuts – What the argument is really about.


Jennifer Lopez will reportedly be earning $12 Million dollars for her role as an American Idol judge.  Let assume only the tax cut for “the rich” is allowed to expire.  What would her tax bill look like with our without the bush tax cuts?

Assume she earned no other sources of income in 2010, $11,750,000 of her salary would be taxed at the highest rate. ($12,000,000 – $250,000 = $11,750,000).   The highest tax bracket with the Bush tax cuts the rate is 36%, without the tax cuts its 39.6%.

So the big picture is this:

With Bush tax cuts:  $11,750,000 * 36% =$4,230,000
Without Bush Tax cuts:  $11,750,000 * 39.6% = $4,653,000

That’s what the whole argument is about.  Should a person earning $12 Million be paying taxes in the amount of $4.2 Million or $4.6 Million.  Either way, no one is getting a free ride.

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