April 15, 2008

Democrats and Republicans Have Very Different Priorities on Taxes

As Americans pay their taxes tomorrow, Democrats continue to push their priorities: tax cuts for middle-class families, America’s military men and women and homeowners struggling to stay in their homes. In contrast, Bush-McCain Republicans have fallen in lock step behind the failed economic policies of the Bush years that have led to the current economic downturn: tax breaks for multi-millionaires and big oil companies while doing little to help middle-class families struggling to make ends meet. Republicans need to reject these failed policies and work with Democrats to help middle-class families squeezed by the economic downturn.

Democrats' priorities: tax cuts for middl-class families, soliders and struggling homeowners:

Senate Democrats’ Budget Provides AMT Relief for 20 Million Americans. The Senate Democrats’ budget prevents more than 20 million Americans from being thrown onto the Alternative Minimum Tax (AMT) by providing a one-year extension of AMT relief. [Chairman’s Mark of FY 2009 Budget Resolution, 3/6/08]

Senate Democrats’ Budget Provides Tax Relief to Make College More Affordable The Senate Democrats’ budget assumes Congress will provide tax relief to make a college education more affordable. [Chairman’s Mark of FY 2009 Budget Resolution, 3/6/08]

Senate Democrats’ Budget Extends Middle-Class Tax Relief, Including Child tax Credit and Marriage Penalty Relief. The Baucus Amendment to the Senate Budget Resolution, which was passed on a 99-1 vote, extends middle-class tax relief, including the child tax credit, marriage penalty relief, adoption credit and the 10 percent tax bracket. [Senator Baucus Press Release, 3/6/08; Senate Vote #42, S. Con. Res. 70, 3/13/08] 

• Extending 10 Percent Tax Bracket, Marriage Penalty and Child Tax Credit Would Provide and Average Tax Savings of $2,209. According to the Democratic Policy Committee, extending the ten percent tax bracket, marriage penalty and the child tax credit would put an average $2,209 in tax savings back in the pockets of American families. [Democratic Policy Committee, “Democrats Are Committed to Relieving Tax Burden on the Middle Class,” 4/11/08]

Senate Democrats’ Budget Provides Tax Relief for America’s Military Men and Women. The Democratic budget included provisions of the Defenders of Freedom Tax Relief Act which will provide a permanent allowance for soldiers to count their non-taxable combat pay towards figuring their Earned Income Tax Credit eligibility; a tax cut for small businesses when they continue paying some salary to members of the National Guard and Reserve on active duty; more flexibility for active duty troops to withdraw money from retirement plans without being penalized; and the ability for families of soldiers killed in the line of duty to contribute up to 100 percent of survivor benefits to retirement savings accounts or to education savings accounts. [Democratic Policy Committee, “Democrats Are Committed to Relieving Tax Burden on the Middle Class,” 4/11/08]

Senate Democrats Passed Tax Relief for Millions of Homeowners. “The Senate on April 10 passed, 84-12, a bipartisan package (HR 3221) built around tax incentives designed to spur the purchase of homes now in foreclosure and to grant relief to struggling homebuilders and other businesses that are in the red. …In addition, taxpayers who do not itemize their deductions but pay property taxes would receive a $500 additional standard deduction — $1,000 for married couples — in 2008. Taxpayers would not be eligible for the deduction if their local governments raise the property tax rate this year.” According to the Democratic Policy Committee, 71.8 million Americans pay property tax, but only 43.5 million deduct state and local property taxes from their income. So the bill could help 28.3 million homeowners. [CQ Weekly, 4/14/08; Democratic Policy Committee, “Democrats Are Committed to Relieving Tax Burden on the Middle Class,” 4/11/08]

Bush-McCain Republican priorities: tax-breaks for multi-millionaires and big oil companies:

The Top 1 Percent of Wage Earners Will Receive 42 percent of the Total Share Of The Bush Tax Cuts for 2008. For 2008, the Center for Tax Justice estimated the top 1 percent of wage earners received 42 percent of the share of the Bush tax cuts. Conversely, the bottom 20 percent of wage earners will receive a 1.2 percent share of the tax cuts. [The Bush Tax Cuts: March 2007]

The Top 1 Percent of Wage Earners Will Receive an Average Tax Cut of $57,000 From Bush Tax Cuts in 2008 – Middle 20 Percent Will Receive an Average of $711. For 2008, the Center for Tax Justice estimated the top 1 percent of wage earners will receive an average of $56,595 from the Bush tax cuts. Conversely, the middle 20 percent of wage earners will receive an average of $711 in 2008. [The Bush Tax Cuts: March 2007]

• Between 2002 and 2006 the Top 1 Percent of Wage Earners Has Seen Their Incomes Rise by 44 Percent. Since 2002, the average income of the top 1 percent of households has risen 44 percent, or $335,000, after adjusting for inflation. Conversely, the average income of the bottom 90 percent of households has risen about 3 percent, or about $1,000. [Center for Budget and Policy Priorities, 3/27/08]

Cost of the Bush Tax Cuts Will Exceed $260 Billion Just For 2008. The Bush tax cuts as enacted into law will cost approximately $262 billion, just for 2008. The total projected cost of the Bush tax cuts over ten years exceeds $2.3 trillion. [The Bush Tax Cuts: March 2007]

Bush-McCain Republican Budget Would Make Bush Tax Cuts for Multi-Millionaires Permanent – Costing $2.4 Trillion Over 10 Years. “The President’s budget would provide more tax cuts heavily skewed to the most well-off while cutting vital services for low- and moderate-income Americans, generating large deficits, and increasing the strain on states already confronting budget problems as a result of the economic downturn… The tax cuts, however, would cost more than $900 billion over five years — and an additional $1.5 trillion in the five years after that, for a total cost of $2.4 trillion over the next decade.” [CBPP, “The Dubious Priorities of President’s FY 2009 Budget,” 2/7/08]

• Tax Breaks for Those Making Over $1 Million Would Average $150,000 Per Year.  “Households with annual incomes over $1 million would get an even larger tax cut:  more than $150,000 a year, on average.  This group makes up just 0.3 percent (three one-thousandths) of the nation’s households, yet its combined tax cuts would exceed the entire amount that the federal government spends on elementary and secondary education, as well as the entire amount that it devotes to medical care for the nation’s veterans.” [CBPP, “The Dubious Priorities of President’s FY 2009 Budget,” 2/7/08] 
• Top 1 Percent Would Receive $1 Trillion in Tax Breaks Over 10 Years. “The top 1 percent of households — those with incomes exceeding $450,000 a year — would receive more than $1 trillion in tax cuts over the next ten years.  (This figure assumes the extension of AMT relief.)  Each year these households would receive more than $60,000 apiece in tax cuts, on average.” [CBPP, “The Dubious Priorities of President’s FY 2009 Budget,” 2/7/08]

Bush-McCain Republicans in the Senate Blocked a Bill That Would Have Reduced Tax Breaks for Oil Companies and Extended Renewable Energy Incentives. “By a narrow margin, the Senate today failed again to block a Republican-led filibuster on an energy bill as GOP leaders made a stand against a $21.8 billion, 10-year tax package that would have extended incentives for wind and solar energy and reduced some tax breaks for oil companies… The 59-40 vote -- one vote short of the margin needed to end debate and clear the way for a vote on the measure -- came after warnings from the White House and Sen. Pete V. Domenici (N.M.), the ranking Republican on the Senate Energy and Natural Resources Committee, that President Bush would veto the bill because of the tax component.” [Washington Post, 12/13/07]

 

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