Analysis: Federal Tax Filers in North Carolina’s Top 5 Percent Will Get Tax Cut 30 Times Bigger Than Bottom 60 Percent If Bush Tax Cuts Continue; Deficit Will Double
On Tenth Anniversary of Bush Tax Cuts, Citizens for Tax Justice and the N.C. Budget & Tax Center Release North Carolina and Federal Fact Sheets With 2013 Projections
RALEIGH (June 7, 2011) – As Congress and the President debate whether and on what conditions to raise the debt ceiling, America will mark the tenth anniversary of the policy change that accounts for much of the federal budget gap: the Bush tax cuts.
On June 7, 2001, President George W. Bush signed into law the first of the tax cuts that would turn the budget surpluses of the 1990’s into historic deficits. A new analysis from Citizens for Tax Justice explains that making these tax cuts permanent would almost double the long-term budget deficit.
“Continuing this cuts-only approach to taxes and the budget will increase the deficit and starve vital public investments in education, health care and critical public safety needs,” said Alexandra Forter Sirota, director of the NC Budget & Tax Center. “Instead, we should reform our revenue system so we can make sustainable investments in the future.”
In North Carolina, the richest one percent of taxpayers, with an average income of about $383,095 in 2013, would get an average tax cut of $15,317 that year if the Bush tax cuts are extended again. The poorest three-fifths of North Carolina taxpayers, with an average income of $25,563 that year, would receive an average tax cut of just $501.
The analysis also finds that the higher a filer’s income, the larger the tax cut as a percentage of income. If the Bush tax cuts are extended again, in 2013 the poorest one-fifth of taxpayers in North Carolina would receive tax cuts equal to 0.6% percent of their income, while the richest one percent would enjoy tax cuts equal to 4.9% percent of their income.
The richest one percent of taxpayers nationally, with an average income of about $1.4 million in 2013, would get an average tax cut of $68,079 that year if the Bush tax cuts are extended again. The poorest three-fifths of taxpayers, with an average income of $29,000 that year, would receive an average tax cut of just $487.
Some in Congress have threatened to cause the U.S. to default on its debt-obligations unless President Obama agrees to major cuts in federal spending to reduce the budget deficit, but they simultaneously demand the Bush tax cuts be made permanent.
Citizens for Tax Justice, founded in 1979, is a 501 (c)(4) public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. http:www.ctj.org.