NC Budget and Tax Center

US House considers whether to end Bush tax breaks for top 2%

On the heels of last week’s high-profile action in the US Senate on tax policies enacted by Presidents Bush and Obama, the US House of Representatives is voting today on multiple proposals designed to address the expiration of $4.5 trillion dollars in tax cuts in January 2013.  At stake is the fairness of our tax system and the ability to achieve a balanced approach to the ongoing fiscal challenges our country faces, one that includes revenue.

There are three proposals that appear likely to be considered.

In voting on H.R. 15, the House will consider elimination of Bush-era tax breaks on incomes over $250,000 per year and the one year extension of tax breaks for families earning less than $250,000, a group making up 98% of North Carolinian taxpayers. In eliminating the tax breaks for the wealthiest 2% of Americans, the country will be better positioned to tackle our long-term fiscal challenges by saving nearly $1 trillion over the next decade.

Important as well are the extensions of key middle- and low-income income tax provisions signed into law by President Obama. This legislation would ensure that North Carolina’s working families will continue to receive Child Tax Credits worth more $800 per family, Earned Income Tax Credits (EITC) worth $500 per family, and the American Opportunity Credit, which assists millions of American college students. It is estimated that more than 500,000 families in North Carolina would benefit from the extension of the Child Tax Credit and EITC alone.

In contrast, however, the second plan under consideration by the House—H.R. 8—will extend for one year all of the Bush-era tax policies, including tax breaks for the top 2%those with incomes over $250,000.  At the same time as it keeps in place tax cuts for the wealthiest Americans, this plan allows all of the tax credits for middle and low-income working families to expire, affecting 13 million Americans.  

A third proposal, HR 6169, would provide for an expedited procedure for considering a revenue neutral tax reform legislation that flattens the federal personal income tax structure, reduces the corporate income tax, and purportedly attempts to pay for these tax reductions by closing various tax loopholes and eliminating tax expenditures.  In practice, this may lead to deep tax reductions for high-income Americans and the elimination of important tax credits for millions of middle- and low-income Americans.

These upcoming votes will be critical in setting the stage for discussion of the fairness of our tax system and will have a significant impact on North Carolinians.  To get back on track, it will be critical that Congress end the tax breaks for the wealthiest 2%.

 

One Comment


  1. Jeff S

    August 1, 2012 at 10:38 am

    They should let the entire plan expire. Of course, that doesn’t seem to be under consideration.

    Republicans will put up their “corporate welfare” option to give the illusion that they have then sacrificed by continuing the status quo.

Check Also

Senate headed down the wrong path on state employee pensions, healthcare?

North Carolina’s state employees would see a bleaker ...

Top Stories from NCPW

  • News
  • Commentary

When Gov. Roy Cooper signed the Strengthen Opioid Misuse Prevention or STOP Act into law last month, [...]

Support for needy districts and key positions within North Carolina’s top public school agency may b [...]

Wilmington is bustling this summer. Downtown, horse-drawn carriages take tourists along the riverfro [...]

For the first time in a long time, trial judges in North Carolina have independent research assistan [...]

It’s not an original thought to point out that the Trump Administration is a larger version of what [...]

Why this is not “business as usual” and should not be condoned Sometimes all one can do is stand and [...]

5.0---percentage of overall state spending in the 2017-2018 budget passed by the General Assembly as [...]

The post A legislative addiction appeared first on NC Policy Watch. [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more


NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more