The Star-Ledger

Republican Plan Would Fund Tax Cuts For Wealthy By Axing Breaks For Poor, Middle Class

The Star-Ledger — Wednesday, August 1, 2012

By The Star-Ledger Editorial Board

When Democrats talk about defending the defenseless, they are usually referring to people: the poor, the elderly. Republicans, meanwhile, are hard at work defending a defenseless policy. For whom? The richest 2 percent of Americans.

The other 98 percent have no reason to support extending big tax cuts for the wealthy. Given the size of our deficit, how can we afford to? But try talking sense into House Republicans, as they suit up in full armor to defend the millionaires, like Don Quixote on some aristocratic crusade.

The GOP-dominated House is expected to vote this week to extend all the tax cuts signed into law by President George W. Bush, which are set to expire at the end of this year — including those for richest among us. The Senate, on the other hand, has voted to extend the cuts only on household income up to $250,000, as President Obama wants to do.

Given the standoff, Congress isn't likely to take more action until after the November election. But this is about sending a message to voters, so let's make sure it's understood: Both sides are essentially offering a tax break for the bulk of Americans, including the rich (Obama's plan would still give them a tax cut on up to $250,000 of their yearly income). Here's the key difference: Republicans are just offering a larger tax break for people who earn more than $250,000.
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To pay for that, they intend to make lower-income families fork over higher taxes, slash other programs and borrow more. They justify this by telling us that the rich deserve to pay taxes at a lower rate than everyone else because they are "job creators."

Never mind that nearly all small business owners would see their tax cuts extended under Obama's plan. Or that the Bush tax cuts have been in existence for more than a decade and we still have little evidence of economic growth, or jobs created.

The cost, however, has been enormous. The average tax cut for people making more than $1 million a year was more than $110,000 in each of the last nine years. That's a lot of revenue lost. And it will cost an additional $1 trillion over the next decade to give more tax cuts to the richest 2 percent.

While fighting to keep these huge tax breaks for people who don't need them, Republicans also plan to make low- and middle-income people pay higher taxes, by ending the improvements on several of their tax credits.

That won't nearly cover the price tag, of course. Next year alone, the Republican tax plan would cost the nation $68 billion more than Obama's.

That's what the federal government will spend in 2012 to repair highways and bridges, improve K-12 education, fund Head Start and school breakfast programs for low-income children, ensure clean drinking water and deliver meals to seniors.

So is it worth it? Check out the chart to see how much of a tax break you'll get with either plan. If you're looking at a windfall, congratulations — you're one of the lucky few. Republicans have your back.

Chartt directly below entitled "Not a good deal" — Sources: NJ Citizen Action; "Time to Pay Their Fair Share: New Jersey Residents Can't Afford to Extend the Bush-era Tax Cuts for the Wealthy Few," by Americans for Tax Fairness, Citizens for Tax Justice, the National Women's Law Center.

chart described in article

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