FOR IMMEDIATE RELEASE
Contact: Judy Putnam, 517.487.5436. email@example.com
Report Shows Impact to Michigan Residents of Extending Bush Tax Cuts for Richest 2% of Americans
Wealthy Few Would Reap Huge Tax Breaks at Expense of Other Michigan Residents
(Lansing, Mich. – Aug. 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 2.1 percent of Michigan taxpayers in that income group could get a disproportionate 36 percent of the total tax breaks in their state. Their average tax cut would be about $31,500.
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 Michigan taxpayers who make more than that amount would be about $14,200, less than half of what they would get under the GOP plan. And the 28 percent of Michigan taxpayers 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 the Michigan League for Human Services, “Time to Pay Their Fair Share: Michigan 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.
“These are lavish tax breaks for those who need them the least. This is exactly the kind of special-interest giveaways from Congress that need to end,” said Gilda Z. Jacobs, president & CEO of the Michigan League for Human Services, a member of the Americans for Tax Fairness campaign. “We call on the House to end the Bush-era tax cuts for the richest 2 percent.”
Major findings of the report include:
- About 98 out of 100 Michigan taxpayers would get about the same tax cut under the Obama plan as they have up until now.
- 2.1 percent of Michigan taxpayers have an average income of about $611,000.
- The other 97.9 percent of the state’s taxpayers make about $55,000 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 $1,460 and $1,450, respectively.
- Michigan taxpayers 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: $290 from Obama, compared to $140 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 Michigan’s share of these funds means for its residents:
- Highway Planning and Construction: Michigan will receive $968.3 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 Michigan taxpayers travel more safely and efficiently and promote economic growth and job creation.
- Title 1 funding to support K-12 education: Michigan will receive $539.2 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 2,899 Michigan schools serving nearly 1.3 million children were eligible for this funding.
- Head Start and Early Head Start preschool programs: Michigan will receive $268.5 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 34,152 children in low-income Michigan families in 2009.
- School Breakfast Program: Michigan will receive $91.1 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 351,500 Michigan children each day.
- Make Drinking Water Safer: Michigan will receive $88.1 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
- Provide Meals to Homebound Seniors: Michigan will receive $6.9 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About 49,603 Michigan seniors received meals through this program in 2010.
“Can we afford to keep giving tax cuts to the richest? No we cannot,” Jacobs said. “And we can’t balance the budget on the backs of our seniors, children and families struggling to make ends meet, and we must stop borrowing from China. It’s only right that those who have done well in America should do well by America and pay their share.”