New analysis finds cuts would give richest $48,500 per year more, give poorest 20% less than Obama’s approach
RALEIGH (June 20, 2012) – High-income North Carolinians would pay far less under the Congressional Republicans’ approach to extending the Bush tax cuts than they would under President Obama’s approach, according to a new analysis from the Institute on Taxation and Economic Policy (ITEP) and Citizens for Tax Justice (CTJ).
“Both President Obama and Congressional Republicans have proposed to extend far too many of these unaffordable tax cuts,” said Robert S. McIntyre, director of Citizens for Tax Justice. “But if we have to choose between the Congressional Republicans’ and President Obama’s approach, however, the President’s proposal is fairer and more responsible.”
Under President Obama’s approach, in 2013, the poorest 20 percent of North Carolinians would receive an average tax cut of $250 while the richest one percent would get an average tax cut of $16,480. Under the Congressional Republicans’ approach, the poorest 20 percent of North Carolinians would receive an average tax cut of $70 while the richest one percent would receive an average cut of $48,540.
The study also finds that under Obama’s approach, 3.2 percent would go to the poorest 20 percent of North Carolinians, 12 percent would go to the middle 20 percent and 10.6 percent would go to the richest 1 percent. Under the Republican plan, one percent of the cuts would go to the poorest 20 percent of North Carolinians, 9.6% percent would go to the middle 20 percent and 27.3 percent would go to the richest one percent.
The Bush tax cuts extension outlined by the President would cost one trillion dollars less over 10 years than would making all the Bush tax cuts permanent.
The term “Bush tax cuts” refers to income tax cuts and estate tax cuts enacted in 2001 and 2003 and extended several times since then. In 2009, President Obama expanded some parts of these tax cuts that benefit low income and working families. In December of 2010, the President and Congress agreed to extend all of these tax cuts through the end of 2012.
The Republicans in Congress have indicated that they would extend all of the tax cuts first enacted in 2001 and 2003, but not the 2009 expansions for lower income families. President Obama wants to extend the 2001 and 2003 tax cuts only for the first $250,000 a married couple makes annually, or the first $200,000 a single person makes. Obama also wants to extend the 2009 expansions.
“Extension of the Bush tax cuts for those earning more than $250,000 will only further support the accumulation of wealth for the wealthiest North Carolinians,” said Alexandra Sirota, Director of the Budget and Tax Center. “It is essential that our federal tax policy better align with ability to pay and allow the country to get back on track with regards to addressing the federal deficit.”
The full report is available at CTJ's website, including state level reports for North Carolina.
Citizens for Tax Justice (CTJ), 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 ( www.ctj.org).
Founded in 1980, the Institute on Taxation and Economic Policy (ITEP) is a 501 (c)(3) non-profit, non-partisan research organization based in Washington, DC that focuses on federal and state tax policy. ITEP's mission is to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy (www.itepnet.org).
FOR MORE INFORMATION CONTACT: Alexandra Forter Sirota, Director, Budget and Tax Center, Alexandra@ncjustice.org, 919.861.1468; Anne Singer, Citizens for Tax Justice, firstname.lastname@example.org, 202.299.1066 x.27.