Tax progressivity and the Bush tax cuts

COMMENTARY Lane Kenworthy, a professor of sociology and political science at the University of Arizona, constructed this graph showing how tax progressivity changed due to the Bush tax cuts:

As he notes, "The Bush tax cuts of the early 2000s reduced the progressivity of federal taxes, but not that much." I would have guessed that the effect on progressivity was larger than this.

The reason that the effect on progressivity was fairly low is that the tax cuts applied to all the quintiles shown in the graph, and were only slightly larger for the upper income group.

However, that's not to say that the cuts had no impact. Where the Bush tax cuts did have a large effect is on tax revenues. The "average effective federal tax rate for all households dropped from 23% in 2000 to 20.4% in 2007," and the decline in average rates lowered federal tax revenue by "roughly $300 billion" in 2007.

As Professor Kenworthy notes, "$300 billion a year wouldn't address all of our revenue needs, but it could do a lot of good."  It's hard to disagree.