WASHINGTON, DC—Today, CAPAF Senior Fellow James Kvaal released the following statement on conservative proposals to fix our economy through tax cuts for the very wealthy:
"Earlier today, the Congressional Budget Office projected that the deficit would hit $1.2 trillion this year while the economy will shrink. The sobering analysis underlines the urgent need for economic recovery legislation and the importance of getting it right.
"But while the year is brand new, the conservative agenda is the same old, tired one. According to proposals released this week, Senator McConnell, the Chamber of Commerce, and the Club for Growth have made it clear that they want big tax cuts for corporations and the richest Americans, no matter the hour or season.
"Tax cuts alongside investments in clean energy, health care, and education can strengthen our economy and create jobs. But skewing those cuts to benefit the wealthiest Americans is not smart policy. Tax cuts for low-income Americans will not only serve as a lifeline for the most vulnerable families, they will also do the most good for the economy. Struggling families are most likely to spend tax relief rather than save it, generating economic activity."
Today, the Wonk Room published the following post on Sen. McConnell’s proposal:
McConnell’s ‘Middle Class’ Tax Cut Gives 10 Times More To Mega-Rich Than To Middle Class Families
On Sunday, during an appearance on ABC’s This Week, Senate Minority Leader Mitch McConnell proposed cutting the 25 percent tax bracket to 15 percent as part of an economic recovery, a move which he claims would cut taxes for “the middle class”:
But Republicans, by and large, think tax relief is a great way to get money to people immediately. A possibility would be to take a look at the 25 percent rate currently applied to the middle class, lower it to 15 percent.
While McConnell’s proposal would provide some limited “immediate” relief, his cut would disproportionately benefit the super rich, not middle class Americans.
A new analysis from the Tax Policy Center finds that this tax change would lower taxes by less than $400 for average middle-class Americans, give a $4,000 tax break to those making over $2.8 million a year, and do nothing for households making less than $40,000.
For households with children the benefits are even more uneven. Families making less than $70,000 a year would see their taxes go down by an average of just $21 and those making between $70,000 and $140,000 would get even less. Households making over $600,000 with children, however, would get an average tax cut of $3,600.
While McConnell and the conservatives would like to dress this up as middle class relief, it’s really just another giveaway for the mega-rich.