MEDIA RELEASE: Study: Extending Middle Class Tax Cuts Would Help Hundreds of Thousands of North Carolina’s Children
Study: Extending Middle Class Tax Cuts Would Help Hundreds of Thousands of
Congress must make the right decisions to support
RALEIGH (Aug. 17) – When Congress returns in September, the tax policy choices they make will directly impact virtually all North Carolina children, a new study shows.
With major tax provisions set to expire by the end of 2010, lawmakers must decide whether to extend tax cuts to middle-class families, tax cuts to the wealthiest Americans, or both.
A new report from the
The report recommends extending the middle-class tax cuts that support public structures while letting the deficit-exploding Bush tax cuts for the wealthiest Americans expire.
“The stability and growth of
Major tax provisions from 2001 and 2003 and the 2009 American Recovery and Reinvestment Act are set to expire by the end of this year. Congress must decide whether to extend or modify temporary improvements to tax credits that help low- and moderate-income working families that were made as part of last year’s American Recovery and Reinvestment Act.
The Recovery Act expanded the Child Tax Credit, increased the Earned Income Tax Credit (EITC) for families with three or more children, increased marriage-penalty relief under the EITC, and created the new American Opportunity Tax Credit to help families pay for college.
If the current Child Tax Credit improvements expire, 594,000
The Bush tax cuts, by contrast, primarily benefited the wealthiest households. This year, the richest one percent of taxpayers will receive more than a third of all the benefits of those tax cuts, while those in the bottom 60 percent will get less than a fifth of the benefits. Extending the portion of the Bush income tax cuts for the wealthiest two percent will account for roughly $1 trillion in new federal debt over the next ten years.
“Both revenue collection and tax rates are at near-historic lows and deficits are at levels not seen since the Second World War,” said McLenaghan. “Extending tax cuts for the wealthy would do little if anything to stimulate the economy, but would create devastating deficits.”