August 6, 2012  |  

Pennsylvania Press Release


ContactJennifer England, 412-513-9091, or Americans for Tax Fairness 202-822-7438

Report Shows Impact to Pennsylvania Residents of Ending Bush Tax Cuts for Richest 2% of Americans

 Wealthy Few Would Still Reap Significant Tax Breaks

(PA – 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 2.7 percent of Pennsylvania taxpayers in that income group could get a disproportionate 40 percent of the total tax breaks in their state. They’re average tax cut would be more than $31,000.

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 Pennsylvanians who make more than that amount would be about $14,000, less than half of what they would get under the GOP plan.  And the 26 percent of Pennsylvanians 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 Americans for Tax Fairness, a coalition including the Pennsylvania group ACTION United, “Time to Pay Their Fair Share: Pennsylvania Can’t Afford to Extend the Bush-era Tax Cuts for the Wealthy Few.” The report is authored by Americans for Tax FairnessCitizens 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 Lucille Prater-Holliday, President of ACTION United, 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:

  •  97 out of 100 Pennsylvanians would get about the same tax cut under the Obama plan as they have up until now.
  •  2.7 percent of Pennsylvanians taxpayers have an average income of about $657,000.
  •  The other 97.3 percent of the state’s taxpayers make about $57,000 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 $1,480 and $1,460, respectively.
  • Pennsylvanians making less than $25,000 a year would get an average tax cut from the Obama plan almost two times larger than from the Republican plan: $240 from Obama, compared to $130 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 Pennsylvania’s share of these funds means for its residents:


  •  Highway Planning and Construction: Pennsylvania will receive $1.5 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 Pennsylvanians travel more safely and efficiently and promote economic growth and job creation.
  • Title 1 funding to support K-12 education: Pennsylvania will receive $565 million in federal funds in FY 2012 for grants to local school districts serving disadvantaged children. In the 2009-2010 school year, 2,453 Pennsylvania schools serving nearly 1.3 million children were eligible for this funding.
  • Head Start and Early Head Start preschool programs: Pennsylvania will receive $262.6 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 35,253 children in low-income Pennsylvania families in 2009.
  • School Breakfast Program:  Pennsylvania will receive $83.4 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 329,500 Pennsylvanian children each day.
  •  Make Drinking Water Safer: Pennsylvania will receive $82.3 million in federal funds in FY 2012 to construct water treatment facilities and ensure clean drinking water.
  • Provide Meals to Homebound Seniors: Pennsylvania will receive $9.7 million in federal funds in FY 2012 to provide home-delivered meals to frail seniors. About 30,725 Pennsylvanians received meals through this program in 2010.

“If we give tax cuts to the rich, we won’t be able to protect middle- and lower-income priorities like educating our kids and providing for our seniors,” said Holiday.  “The wealthiest people in our country already receive the biggest tax breaks, and we just can’t afford to keep giving tax cuts to those who need them the least. Giving tax cuts to the richest 2 percent also makes it harder to bring the budget deficit under control, which means we keep borrowing billions from China every year.”