Over the last three months of this year, Congress faces the critical challenge of addressing the scheduled expiration of $5 trillion in tax cuts passed under Presidents Obama and Bush, currently slated for January 2013. In addressing this challenge, Congress will have to decide who needs the most help. So the real question is: Who will have a better 2013, moms or millionaires?
A study released today from the Center on Budget & Policy Priorities lays out the perils of helping millionaires at the expense of helping moms. Eliminating the expansion of middle-class tax credits like the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Credit will increase the burden for half a million families and over 1 million children. Moms rely on these credits to meet the needs of their families.
Congressional proposals geared towards helping millionaires instead would increase the deficit by over $1 trillion while providing enormous benefits for just a handful of the state’s residents. Only 1.4% of the state’s families and 2.5% of the state’s small businesses will benefit from the extension of the Bush-era tax breaks. Only 140 families—less than 0.2% of the state’s population—would benefit from the proposed inheritance tax cut. Their average tax cut would exceed $1 million, in contrast to the $2,000 in tax credits a poverty-line family of three would receive under the Senate plan.
Given the state’s rising unemployment and a stagnating economic recovery, eliminating these credit expansions and increasing the burden on working moms and families would be the worst possible policy to pursue. Let’s help moms instead of millionaires.