Impact to NC Residents of Extending Bush Tax Cuts
Press call at 10 am Wed, August 1
Conference Dial-in Number: (213) 493-0800
Participant Access Code: 722584#
FOR IMMEDIATE RELEASE
Contact: Kevin Rogers, 919.862.4009, [email protected]
Report Shows Impact to North Carolina Residents of Extending Bush Tax Cuts for Richest 2% of Americans
Wealthy Few Would Reap Huge Tax Breaks at Expense of Other N.C. Residents
(Raleigh, NC – July 31, 2012) If the U.S. House of Representatives passes the Republican plan this week to extend the Bush-era tax cuts for one year for households making over $250,000, the wealthiest 2.2 percent of North Carolina taxpayers in that income group could get a disproportionate 34 percent of the total tax breaks in their state. Their average tax cut would be about $28,000.
In contrast, if Congress passed President Obama’s plan to extend the Bush tax cuts on the first $250,000 in household income, the average tax cut for North Carolina taxpayers who make more than that amount would be about $13,000, or less than half of what they would get under the GOP plan. And the 31 percent of North Carolina taxpayers with income up to $25,000 would get larger average tax cuts under the Obama plan than under the Republican plan.
Those are among the key findings of a new report released today by Action NC, “Time to Pay Their Fair Share: North Carolina Can’t Afford to Extend the Bush-era Tax Cuts for the Wealthy Few.” The report is authored by Americans for Tax Fairness, Citizens for Tax Justice and the National Women’s Law Center.
The report is timely because this week the U.S. House of Representatives will vote on the Republican plan to extend all the Bush tax cuts, including for the richest 2 percent of U.S. households, while ending improvements in tax credits for low-end and moderate-income families. The Democrats will offer an alternative plan similar to President Obama’s, which the U.S. Senate passed last week by a 51 to 48 vote.
“Giving lavish tax breaks for those who need them the least is exactly the kind of special-interest giveaways Washington needs to stop,” said Pat McCoy, Executive Director of Action NC, a member of the Americans for Tax Fairness campaign. “We urge the House to end the Bush-era tax cuts to the richest 2 percent.”
Major findings of the report include:
- About 98 out of 100 North Carolina residents would get about the same tax cut under the Obama plan as they have up until now.
- 2.2 percent of North Carolina taxpayers have an average income of about $612,000.
- The other 97.8 percent of the state’s taxpayers make about $52,000 on average.
- The average tax cut for those making between $50,000 and $100,000 would be roughly the same under both the Obama and GOP plans: both about $1,380.
- North Carolina taxpayers making less than $25,000 a year would get an average tax cut from the Obama plan roughly two times larger than from the Republican plan: $410 from Obama, compared to $210 from the GOP, because the GOP plan would end improvements in the Earned Income Tax Credit and Child Tax Credit for lower-income working families while the Obama plan would extend them.
The additional tax cuts for the wealthiest 2 percent of U.S. households under the Republican plan will cost approximately $68 billion next year alone. That’s equal to what the federal government spends to repair highways, improve education and provide school breakfasts for low-income children, ensure clean drinking water, and deliver meals at home to frail seniors. The report breaks down what North Carolina’s share of these funds means for its residents:
- Highway Planning and Construction: North Carolina will receive $957 million in federal funds in FY 2012 to help it plan, build, and repair highways and bridges and support other transportation improvements. These investments in infrastructure help all North Carolina residents travel more safely and efficiently and promote economic growth and job creation.
- Title 1 funding to support K-12 education: North Carolina will receive $399.5 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 1,971 North Carolina schools serving more than 1 million children were eligible for this funding.
- Head Start and Early Head Start preschool programs: North Carolina will receive $172.3 million in federal funds in FY 2012 for Head Start, which helps preschool-age children in low-income families build the skills they need to succeed in school. Head Start and Early Head Start preschool programs served 18,903 children in low-income North Carolina families in 2009.
- School Breakfast Program: North Carolina will receive $109 million in federal funds in FY 2012 for the school breakfast program, which provides free or reduced price breakfasts to children from low- and moderate-income families. A nutritious breakfast improves children’s health and helps them start the day ready to learn. In 2011, the program served an average of 382,085 North Carolina children each day.
- Make Drinking Water Safer: North Carolina will receive $49.5 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
- Provide Meals to Homebound Seniors: North Carolina will receive $6.4 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About 19,925 North Carolina seniors received meals through this program in 2010.
“We can’t afford to keep giving tax cuts to the richest,” said McCoy. “We can’t balance the budget on the backs of children, seniors, and families struggling to make ends meet, and we can’t keep borrowing from China. Those who have done well in America should do well by America and pay their fair share.”