The Examiner: GOP plan taxes poor and middle class for the benefit of wealthiest .03 percent
media mentionGOP Tax Proposal
July 25, 2012
By: James Johnson
The lengthy title and subtitle of the latest Center on Budget and Policy Priorities report truly says it all, “Senate and House GOP Leaders’ Tax Proposals Would Provide Windfall for Heirs of Largest Estates, But Would Let Child Tax Credit and Earned Income Tax Credit Improvements for 13 Million Working Families Expire.”
The report, issued as new, is an extensive revision of an earlier report by Chye-Ching Huang. I details how the latest House and Senate GOP tax proposal would provide tax breaks that average over $1 million per estate to the heirs of 0.3 percent of the wealthiest estates by extending the 2010 compromise on estate-tax rules.
The cost of the proposal over the next ten years would be $119 billion more in lost revenues than the Obama Administration proposal to revert to “the already generous 2009 estate-tax rules.” An analysis by the Urban Institute-Brookings Tax Policy Center showed that only the estates of that .03 percent would be affected by the changes.
Additionally, the GOP proposal would give taxable estates an average of more than $1.1 million each in tax reductions, compared to the tax that would be owed under a reinstatement of the 2009 estate-tax rules. The bigger the estate, the more lavish the tax break would be. Estates worth more than $20 million would receive an average tax reduction of $4.2 million in 2013.[3]
To offset, while not paying for the revenue shortfall, the GOP proposals will allow provisions of the 2010 legislation to lapse, including those that extended tax credits for millions of low and moderate income working families, and college students. Other provisions that will not be extended are improvements in the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC), which would affect more than 13 million working poor and moderate income earning families, affecting nearly 26 million children.
The Institute on Taxation and Economic Policy estimates, in a report released on Wednesday, that the the Treasury Department estimate of the effect of failure to extend all of the refundable credit improvements in the 2010 legislation, would affect 25 million families with incomes below $250,000.
A noted in the report, the “Republican proposals come at a time when the nation faces unsustainable long-term budget deficits and gaping income inequality. This proposal would make both problems worse.” Truly, if not indeed intended to exacerbate the problems by design, the proposal was at least the product of the incapacity to comprehend basic economic principle.
The only options available to remedy the GOP proposal’s flaws would include, as stated in the report, massive budget cuts ranging from “education and basic research to protecting the environment and the food and water supply and even national defense, as well as cuts that could reduce access to health care for low-income children and families and people who are elderly or have disabilities.”
The report goes on to detail the fundamental flaws in the GOP proposal, flaws that will erase two over hundred years of of societal evolution, and thrust the nation into the image of America painted by Howard Zinn’s People’s History of the United States. With their every attempt to legislate, congressional Republicans demonstrate their unsuitability for office, and the reasons they must be reduced to an all but inaudible voice of dissent.