RALEIGH, NC (October 11, 2012) – Recent proposals from Republican leaders in the U.S. House and Senate would extend lucrative tax breaks for 140 multi-million-dollar estates in North Carolina while letting tax improvements expire for 522,645 moderate-income North Carolina working families with 1.1 million children, according to a new report from the nonpartisan Center on Budget and Policy Priorities.
The proposals would continue an estate tax cut Congress enacted in 2010 that would benefit just the wealthiest 0.3 percent of estates (about 7,000 estates nationwide), expanding budget deficits by $141 billion over ten years. But the proposals would not continue vital tax credit improvements for 25 million working families including the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and the American Opportunity Tax Credit (AOTC). Failure to extend these tax credit improvements would push over a million people, including 900,000 children, into poverty nationwide. It would also reduce federal financial assistance for nearly 11 million low-and middle-income families to help them gain access to higher education.
“North Carolina’s Senators and Representatives should reject proposals that would push thousands of working families and their children into poverty, while delivering a significant tax break to just .2 percent of North Carolina’s wealthiest estates,” stated Alexandra Forter Sirota from the Budget & Tax Center, a project of the North Carolina Justice Center. “Low- and middle-income families depend on refundable tax credits to stay afloat and provide their children with a brighter future. These families should not have to sacrifice even more than they already have to provide yet another tax break to the wealthiest Americans.”
In 2010, Congress passed a generous, temporary estate tax cut for the wealthiest 3 out of every 1,000 estates, providing them with a windfall of an additional $1.1 million, on average, and costing $119 billion over a decade in lost revenue. This significant cut followed nine years of considerable reductions in the estate tax which quadrupled the amount that heirs can receive tax-free.
The House and Senate leadership proposals would continue this generous exemption, while failing to continue tax credit improvements for working families that Congress extended at the same time it cut the estate tax. Those improvements are slated to expire December 31.
FOR MORE INFORMATION CONTACT: Alexandra Forter Sirota, BTC Director, email@example.com, 919.861.1468; Jeff Shaw, Director of Communications, firstname.lastname@example.org, 503.551.3615.