FOR IMMEDIATE RELEASE
Contact: TJ Helmstetter
Report Shows Impact to Coloradans of Extending Bush Tax Cuts for
Richest 2% of Americans
Wealthy Few Would Reap Huge Tax Breaks at Expense of Other Colorado Residents
(Denver, Colo. – August 1, 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 3.6 percent of Coloradans in that income group could get a disproportionate 47 percent of the total tax breaks in their state. Their average tax cut would be about $32,000.
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 Coloradans who make more than that amount would be $12,000, about one third of what they would get under the GOP plan. And the 24 percent of Coloradans 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 AFSME, Colorado AFL-CIO, Colorado Education Association, Colorado Fiscal Policy Institute, Colorado Progressive Action, Colorado Progressive Coalition, SEIU Colorado, Together Colorado and Working America, “Time to Pay Their Fair Share: Colorado 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.
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 percent 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.
“Giving lavish tax breaks for those who need them the least is exactly the kind of special-interest giveaways Washington needs to stop,” said Mike Cerbo, Executive Director, Colorado AFL-CIO a member of the Americans for Tax Fairness campaign. “We urge the House to end the Bush-era tax cuts to the richest 2 percent.”
Major findings of the report include:
- About 96 out of 100 Coloradans would get about the same tax cut under the Obama plan as they have up until now.
- 3.6 percent of Coloradans taxpayers have an average income of $712,000.
- The other 96.4 percent of the state’s taxpayers make about $61,000 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 $1,310 and $1,300, respectively.
- Coloradans making less than $25,000 a year would get an average tax cut from the Obama plan roughly two times larger than from the Republican plan: $320 from Obama, compared to $170 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 2 percent of U.S. households under 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 Colorado’s share of these funds means for its residents:
- Highway Planning and Construction: Colorado will receive $491.5 million 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 Coloradans travel more safely and efficiently and promote economic growth and job creation.
- Title 1 funding to support K-12 education: Colorado will receive $148.6 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 674 Colorado schools serving 241,229 children were eligible for this funding.
- Head Start and Early Head Start preschool programs: Colorado will receive $81 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 9,820 children in low-income Colorado families in 2009.
- School Breakfast Program: Colorado will receive $32.4 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 126,776 Colorado children each day.
- Make Drinking Water Safer: Colorado will receive $27.4 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
- Provide Meals to Homebound Seniors: Colorado will receive $2.9 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About 8,793 Coloradans received meals through this program in 2010.
“We can’t afford to keep giving tax cuts to the richest,” said Mike Kromrey, Director, Together Colorado. “We can’t balance the budget on the backs of children, seniors, and families struggling to make ends meet, and we can’t keep borrowing from China. Those who have done well in America should do well by America and pay their fair share.”