FOR IMMEDIATE RELEASE
Report Shows Impact to Ohio Residents of Ending Bush Tax Cuts for Richest 2% of Americans
Wealthy Few Would Still Reap Significant Tax Breaks
Columbus, OH – July 30, 2012 If the U.S. House of Representatives passes the Republican plan this week to extend the Bush-era tax cuts for one year for households making over $250,000, the wealthiest 1.7% of Ohio taxpayers in that income group could get a disproportionate 34% of the total tax breaks in their state. Their average tax cut would be about $33,000.
In contrast, if Congress passed President Obama’s plan to extend the Bush tax cuts on the first $250,000 in household income, the average tax cut for Ohioans who make more than that amount would be about $16,000, or less than half the amount under the GOP plan. And the 30% of Ohioans with income up to $25,000 would get larger average tax cuts under the Obama plan than under the Republican plan.
Those are among the key findings of a new report released today by One Ohio Now and ProgressOhio, “Time to Pay Their Fair Share: Ohioans Can’t Afford to Extend the Bush-era Tax Cuts for the Wealthy Few.” The report is authored by Americans for Tax Fairness, Citizens for Tax Justice and the National Women’s Law Center.
A PDF copy of the report is available for download here.
The report is timely because this week the U.S. House of Representatives will vote on the Republican plan to extend all the Bush tax cuts, including for the richest 2% of U.S. households, while ending improvements in tax credits for low-end and moderate-income families. The Democrats will offer an alternative plan similar to President Obama’s, which the U.S. Senate passed last week by a 51 to 48 vote.
“Handing out lavish tax breaks to those that need them least is exactly the kind of special-interest giveaway Washington needs to stop,” said Bret Thompson, Policy Director at ProgressOhio, a member of the Americans for Tax Fairness campaign. “We urge the House to end the Bush-era tax cuts to the richest 2%.”
Major findings of the report include:
- 98 out of 100 Ohioans would get about the same tax cut under the Obama plan as they have had up until now.
- 1.7 % of Ohio taxpayers have an average income of about $613,000.
- The other 98.3% of the state’s taxpayers make about $49,000 on average.
- The average tax cut for those making between $50,000 and $100,000 would be roughly the same under both the Obama and GOP plans: about $1,500 and$1,480, respectively.
- Ohioans making less than $25,000 a year would get an average tax cut from the Obama plan nearly two times larger than from the Republican plan: $350 from Obama, compared to $190 from the GOP, because the GOP plan would end improvements in the Earned Income Tax Credit and Child Tax Credit for lower-income working families while the Obama plan would extend them.
The additional tax cuts for the wealthiest two percent in the Republican plan will cost approximately $68 billion next year alone. That’s equal to what the federal government spends to repair highways, improve education and provide school breakfasts for low-income children, ensure clean drinking water, and deliver meals at home to frail seniors. The report breaks down what West Virginia’s share of these funds means for its residents:
- Highway Planning and Construction: Ohio will receive $1.2 billion in federal funds in FY 2012 to help it plan, build, and repair highways and bridges and support other transportation improvements. These investments in infrastructure help all Ohioans travel more safely and efficiently and promote economic growth and job creation.
- Title 1 funding to support K-12 education: Ohio will receive $583.1 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 2,863 Ohio schools serving more than 1,274,888 children were eligible for this funding.
- Head Start and Early Head Start preschool programs: Ohio will receive $287.6 million in federal funds in FY 2012 for Head Start, which helps preschool-age children in low-income families build the skills they need to succeed in school. Head Start and Early Head Start preschool programs served 37,072 children in low-income Ohio families in 2009.
- School Breakfast Program: Ohio will receive $99.7 million in federal funds in FY 2012 for the school breakfast program, which provides free or reduced price breakfasts to children from low- and moderate-income families. A nutritious breakfast improves children’s health and helps them start the day ready to learn. In 2011, the program served an average of 396,715 Ohio children each day.
- Make Drinking Water Safer: Ohio will receive $108.4 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
- Provide Meals to Homebound Seniors: Ohio will receive $8.2 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About40,457 Ohioans received meals through this program in 2010.
“We just can’t afford to keep handing out tax cuts to the wealthiest among us,” said Bret Thompson. “Balancing the budget on the backs of children, seniors, and families struggling to make ends meet isn’t consistent with our values. Those who have done well in America should do well by America by paying their fair share.”