Federal Proposals Would Extend Tax Breaks for a Handful of Wealthy Kentuckians While Ending Support for Many Working Families
October 15, 2012
Federal Proposals Would Extend Tax Breaks for a Handful of Wealthy Kentuckians
While Ending Support for Many Working Families
Recent proposals from Congressional Republican leaders would extend lucrative tax breaks for 50 multi-million-dollar estates in Kentucky (0.1% of Kentucky’s estates) while letting tax improvements expire for 183,209 moderate-income Kentucky families with 332,944 children, according to a new report from the nonpartisan Center on Budget and Policy Priorities.
The proposals would continue an estate tax cut Congress enacted in 2010 that would benefit a tiny fraction of the wealthiest estates nationwide while expanding budget deficits by $141 billion over ten years. But the proposals would not continue vital tax credit improvements for millions of working families including the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC) and the American Opportunity Tax Credit (AOTC). Failure to extend these tax credit improvements would push over a million people, including 900,000 children, into poverty nationwide.
“Kentucky’s federal delegation should reject plans that would increase poverty while giving big tax breaks to just 50 of Kentucky’s wealthiest estates,” said Jason Bailey, Director of the Kentucky Center for Economic Policy. “Refundable tax credits improve the lives of over 183,000 Kentucky working families, including many children. They should not be asked to sacrifice more to provide yet another tax break to those with the greatest wealth.”
In 2010, Congress passed a generous, temporary estate tax cut for the wealthiest estates, providing them with a windfall of an additional $1.1 million on average. This significant cut followed nine years of reductions in the estate tax which quadrupled the amount that heirs can receive tax-free.
Proposals from the leadership of the House and Senate would continue this generous exemption, while failing to continue tax credit improvements for working families that Congress extended at the same time it cut the estate tax. Those improvements are scheduled to expire December 31.
The Center’s full report can be found at: http://www.cbpp.org/cms/index.cfm?fa=view&id=3850.