When Congress returns from its August recess next month, it faces the critical business of addressing the more than $5 trillion in tax packages signed under President Bush and President Obama set to expire in January 2013.
Before leaving town, the US House and the US Senate each managed to pass legislation extending these tax breaks, but these two plans treat the middle class very differently. The Senate version extends tax cuts for 98% of Americans for one year, while eliminating tax breaks on incomes over $250,000—a provision which will reduce the Federal budget deficit by $1 trillion and only affects 2.2% of North Carolina’s residents.
The House-passed version, on the other hand, embodies very different priorities. It keeps in place the tax cuts for incomes over $250,000 for another year, while eliminating tax credits for more than 13 million low- and middle-income working Americans. In effect, the House-passed plan finances big tax breaks for the wealthy by asking the middle class to contribute more.
These two plans could not be more different, and the Center for Tax Justice recently launched a new tax calculator to help Americans see for themselves just how dramatic these differences are.
But an important aspect that isn’t captured in the calculator is the impact on our lives—beyond each of our own pocketbooks. In fact, given the revenue that would be lost under the House-passed plan in one year alone, there would be fewer dollars to invest in our state’s infrastructure for business and everyone’s wellbeing, educating our children, and feeding housebound seniors for example. The loss of these investments must be part of our calculation of how each proposal will impact our lives.