Month: May 2003

May 29, 2003 03:42 PM | Permalink |

The highly-touted temporary increase in the per-child tax credit to $1,000 for 2003 and 2004 will provide no benefit to one out of four families with children under 17, because they do not earn enough to qualify for the aid.

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May 16, 2003 04:19 PM | Permalink |

The tax cut plan approved by the Senate late last night offers the best-off one percent of Americans a $69,000 tax reduction over the next four years. That’s two-thirds more than the bill reported by the Senate Finance Committee on May 8. The key change in the bill is a vastly expanded dividend tax break, which passed the Senate by a 51-50 vote, with Vice-President Dick Cheney breaking the tie.

Assuming that the bill’s supposedly temporary measures are actually extended past their alleged “sunset” dates, the bill is likely to cost close to a trillion dollars over the upcoming decade — almost three times the bill’s jokingly advertised cost of $350 billion. Most notably, extending the dividend exemption past 2006 would raise its ten-year cost by at least $250 billion and extending the bill’s alternative minimum tax relief past 2005 would cost more than $300 billion over the same period.

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May 14, 2003 12:20 PM | Permalink |

The economic stimulus bill proposed by Senate Democratic Leader Tom Daschle (D-SD) provides a bigger immediate boost to the economy and larger tax cuts for most taxpayers over the next two years than competing plans approved by Republicans in the House and on the Senate Finance Committee. At the same time, the Democratic plan avoids the huge increase in long-term federal borrowing that the Republican plans entail.

A computer analysis of the tax provisions of the Democratic plan by the Institute on Taxation and Economic Policy finds:

Over the next two years, the Democratic plan offers an average tax cut of $575 to middle- and low-income taxpayers. That compares to only $347 under the House bill and $215 under the Senate Finance Committee bill.

More than 43 percent of the tax cuts in the Democratic plan over the next two years would go to taxpayers in the bottom three-fifths of the income scale. In contrast, the House bill offers these 80 million families and individuals only 9.2 percent of its tax cuts over the next two years. The Senate GOP plan provides them with only 10 percent of its tax cuts.

The House GOP plan would provide the best-off one percent of all taxpayers with an average of $72,106 in tax cuts over the next two years. The Senate GOP plan gives this group an average of $28,005 over two years. The Senate Democratic plan provides $2,301 in tax relief to the wealthiest families.

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May 13, 2003 04:21 PM | Permalink |

The tax bill approved by the Senate Finance Committee on May 8 and scheduled for Senate debate this week would borrow $350 billion over the upcoming decade to finance still more tax reductions. More than half of the tax cuts would go to the best-off 10 percent.

A computer analysis of the Finance Committee plan by the Institute on Taxation and Economic Policy finds that over the bill’s first four years:

• More than fifty percent of the total tax cuts would go to the best-off 10 percent of all taxpayers.
• In contrast, the bottom 60 percent of taxpayers would get only 11.9 percent of the tax cuts, averaging about $100 a year over the next four years.
• The average tax reduction for the richest one percent over the next four years would total $41,117. This tiny but wealthy group would enjoy almost a fifth of the tax cuts over the four years.

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May 6, 2003 04:22 PM | Permalink |

Most of the $550 billion that the House Ways and Means Committee would borrow to pay for the tax-cut bill it marked up today is targeted to benefit the best-off five percent of Americans. A computer analysis of the plan by the Institute on Taxation and Economic Policy finds that over the bill’s first four years (when almost all of its 10-year cost would be incurred):

Fifty-two percent of the total tax cuts would go to the best-off five percent of all taxpayers.

In contrast, the bottom 60 percent of taxpayers would get only 9 percent of the tax cuts.

The average four-year tax reduction for the richest one percent over the four years would total $133,557. This tiny but wealthy group would enjoy a third of the tax cuts over the four years. Starting in 2006, the top one percent would get more than half of the bill’s total tax cuts.

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