Disclaimer: I stayed up till 5 in the morning last night. And I got to work on time this morning. So I'm a little out of it.
Anyway, the Bush tax cuts are a big deal right now, and our tax professor has furnished me with many excellent links and class discussions on the topic.
Let me lay it out for you. The Bush tax cuts, set to expire in 2009, are being currently reviewed for an extension for 2010. I think it likely that they'll get passed, because of the political clout of the angry rich. That is a link to Paul Krugman's article on this subject. Almost every link here will give you a better treatment of the subject than I will, but I shall press on nonetheless.
Bush II's tax cuts in 2003 changed the tax rates. They also backdoored a number of other tax cuts. That's right, you can shrink the tax base too in that manner. Think about it as a fraction, increasing or decreasing the denominator has a directly correlative effect on the take. Enough about backdoors. Here's the rub, take a look at the chart below:
Anyway, the crux of this post is this: The reason the Bush taxcuts are expiring is because they would have never passed through Congress if they had been completely honest. I don't mean to infer foulplay, just dirty pool. Per a rule established in the last decade, all budget increases have to be balanced by budget cuts. Which means that every tax cut comes with a price tag, i.e. the money that tax isn't taking in, that 4.6 percent of the top 1% taxable income (and so on down the line). If they'd made the cuts permanent, or if they begin extending them indefinitely, it will cost the government 700 billion dollars. But the republithugs played this pretty smart, they knew that it's harder to enact new taxes than it is to cut taxes. Now that the cuts are set to expire the hue and cry is to keep extending them.