FOR IMMEDIATE RELEASE
Contact: TJ Helmstetter
Report Shows Impact to New Mexico Residents of Extending Bush Tax Cuts for Richest 2% of Americans
Wealthy Few Would Reap Huge Tax Breaks at Expense of Other New Mexico Residents
(Santa Fe, N.M. – July 31, 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 2.2 percent of New Mexicans in that income group could get a disproportionate 29 percent of the total tax breaks in their state. Their average tax cut would be about $23,000.
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 New Mexicans who make more than that amount would be about $11,400, less than half of what they would get under the GOP plan. And the 27 percent of New Mexicans 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, “Time to Pay Their Fair Share: California Can’t Afford to Extend the Bush-era Tax Cuts for the Wealthy Few,” 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 Frank Clemente, campaign manager for Americans for Tax Fairness. “We urge the House to end the Bush-era tax cuts to the richest 2 percent.”
Major findings of the report include:
- About 98 out of 100 New Mexicans would get about the same tax cut under the Obama plan as they have up until now.
- 2.2 percent of New Mexicans have an average income of about $577,000.
- The other 97.8 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 $1,410 and $1,390, respectively.
- New Mexicans making less than $25,000 a year would get an average tax cut from the Obama plan two times larger than from the Republican plan: $380 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 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 New Mexico‘s share of these funds means for its residents:
- Highway Planning and Construction: New Mexico will receive $330 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 New Mexico taxpayers travel more safely and efficiently and promote economic growth and job creation.
- Title 1 funding to support K-12 education: New Mexico will receive $121.1 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 751 New Mexico schools serving nearly 290,500 children were eligible for this funding.
- Head Start and Early Head Start preschool programs: New Mexico will receive $62.7 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 7,249 children in low-income New Mexico families in 2009.
- School Breakfast Program: New Mexico will receive $36.6 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 139,500 New Mexico children each day.
- Make Drinking Water Safer: New Mexico will receive $16 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
- Provide Meals to Homebound Seniors: New Mexico will receive $1.4 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About 9,746 New Mexico seniors received meals through this program in 2010.
“We can’t afford to keep giving tax cuts to the richest,” concluded Clemente. “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.”