EASING THE BURDEN ON NEW YORK CITY’S MIDDLE CLASS AND THOSE
ASPIRING TO GET THERE

Congressman Weiner’s “Middle Class Tax Relief Act” restores progressivity to the nation's tax code, easing the tax burden on over 2.7 million middle class families in New York City and those struggling to make it.

Under the Weiner plan, 2.7 million New Yorkers – 79% of New York tax filers – will see their taxes reduced by an average of $934. The plan is paid for with a 7% surcharge on incomes over $1 million and a 10% surcharge on incomes over $1 billion. The plan also fixes the AMT which has saddled many middle class New Yorkers with a dramatically higher tax bill. In addition, the Weiner plan, which will be introduced in Washington this week, creates a new zero tax bracket for those making under $25,000.

HIGHLIGHTS OF THE WEINER TAX PLAN:

• Gives a 10% Tax Cut to Families Making Under $150,000: All New York families earning less than $150,000 per year, and all single filers earning less than $75,000 per year, will receive a 10% tax cut under the Weiner plan.  An estimated 1.8 million middle class New York families will benefit from an average tax cut of $436.
  
  
• Creates a Zero Tax Bracket for Families Making Under $25,000: The Weiner plan creates a new “zero” tax bracket for middle class families earning less than $25,000 per year and single filers earning less than $12,500 per year, meaning filers at or slightly above the federal poverty level will pay no tax.  An estimated 288,000 New York families will benefit from an average tax cut of $245.
  
  
•  Doubles the Child Tax Credit for Families Making Under $150,000: Currently, all families – regardless of income – are eligible for a $1,000 child tax credit for every child under 18.  The Weiner plan doubles the child tax credit to $2,000 for middle class families earning less than $150,000 and for single filers earning less than $75,000.  An estimated 1.2 million middle class New York families will benefit.
  
  
• Fixes the Alternative Minimum Tax:  Originally intended to prevent wealthy taxpayers from overusing deductions, the Alternative Minimum Tax (AMT) has ensnared middle class families, forcing them to pay higher taxes.  In 2005, 15% of families making between $75,000 and $100,000 had to pay the AMT and, while Congress enacted a temporary patch for 2006, millions of middle class families are set to fall victim to the AMT again in 2007.  The Weiner plan restores progressivity to the tax code by exempting middle class families making under $200,000, and single filers earning less than $100,000, from the AMT.  An estimated 491,000 middle class New York families will benefit from average tax cut of $1,972.
  
  
• Makes the Tax Code More Progressive: Our current tax code is becoming more and more regressive in nature, as low-income groups are increasingly expected to shoulder more of the country’s tax burden than high-income groups.  The Weiner plan reverses this trend and restores progressivity to the tax structure with a 7% surtax on incomes over $1 million.  By asking 19,000 of the wealthiest New Yorkers to pay a little more, 2.7 million middle class New York families will get a tax cut.
  
  
• Overall, 2.7 Million New York Families Will Get a Tax Cut.
  
  

Here’s how a few New Yorkers will fare under the proposal:

EXAMPLE #1: FAMILY OF FOUR EARNING $150,000
A typical family of four with $150,000 in adjusted gross income currently pays about $27,300 in federal taxes – 18% of their income.

Under the Weiner plan, this family would get a 10% tax credit, $2,000 extra dollars through the child tax credit and be shielded from the AMT.

This family would get a $7,400, or 27%, tax cut under the Weiner plan.

The family’s total federal income tax liability would be reduced to about $19,900.

EXAMPLE #2: FAMILY OF FIVE EARNING $80,000
A typical family of five with $80,000 in adjusted gross income currently pays about $6,100 in federal taxes – 8% of their income.

Under the Weiner plan, this family would get a 10% tax credit, $3,000 extra dollars through the child tax credit, and be shielded from the AMT.

This family would get a $5,725, or 93%, tax cut under the Weiner plan.

The family’s total federal income tax liability is reduced to about $375.

EXAMPLE #3: SINGLE NEW YORKER EARNING $60,000
A typical bachelor with $60,000 in adjusted gross income currently pays about $9,200 in federal taxes – 15% of his income.

Under the Weiner plan, he would get a 10% tax credit.

This person would get a $900, or 10%, tax cut under the Weiner plan.

The individual’s total federal income tax liability is reduced to about $8,300.

EXAMPLE #4: SINGLE, PARENT EARNING $35,000
A typical single parent with one child making $35,000 in adjusted gross income currently pays about $1,500 in federal taxes – 4% of income.

Under the Weiner plan, the single parent would get a 10% tax credit and $1,000 extra dollars through the child tax credit.

This parent would get a $1,250, or 83%, tax cut under the Weiner plan.

The parent’s total federal income tax liability is reduced to about $250.

Source: Congressional Joint Committee on Taxation