The non-partisan Joint Committee on Taxation (JCT), which estimates the revenue impact of tax proposals before Congress, has confirmed CTJ’s calculations of the dire consequences of House Democratic Leader Nancy Pelosi’s tax proposal.
Last week CTJ concluded that Pelosi’s plan to extend the Bush income tax cuts for the first $1 million of income earned by a taxpayer would save 43 percent less revenue than President Obama’s plan, which would extend the income tax cuts for “only” the first $250,000 earned by a family and the first $200,000 earned by a single person.
The JCT figures, which were cited in a new report from the Center on Budget and Policy Priorities, show that Obama’s plan would save $829 billion over a decade, compared to the Republican proposal of extending the Bush income tax cuts for all income levels, and that Pelosi’s plan would save just $463 billion (44 percent less).
CTJ also found that 50 percent of the additional tax cut that would result from Pelosi’s plan (from extending the tax cuts for the first $1 million instead of “just” the first $250,000/$200,000) would go to people with incomes in excess of $1 million.
This would happen because under Pelosi’s plan, millionaires would pay the lower Bush-era tax rates on the first million of their income whereas under Obama’s plan they would pay the lower Bush-era tax rates on “only” the first $250,000 or $200,000 of their income.