Congress should not extend Bush Tax Cuts for the wealthy

One of the most important issues the “lame-duck” Congress must deal with before a new Congress takes office in January is the extension of the Bush Tax Cuts, which are set to expire on Dec. 31.

Given high unemployment and the ongoing recession, now is the time to end the tax breaks for the wealthy.

The savings from ending the high-end cuts for those with incomes over $250,000 would be approximately $40 billion in 2011 alone.  That’s much needed money for our nation’s priorities. Now more than ever, we cannot afford to waste resources on tax breaks for the richest in society.

Even a temporary extension of another year or two is a bad idea. It would increase the likelihood that the high-end tax cuts would eventually be made permanent. And it would unnecessarily add nearly $1 trillion (including interest costs) over the next 10 years to the deficit.

Congress should continue tax cuts that provide relief for tens of millions of working families and children. If these credits are not extended, families with incomes between $12,850 and $16,333 would be the ones who’d lose the most. Many of them are parents who work full time at minimum wage.

Those tax cuts include:

• Child Tax Credit (CTC): provides support to low- and moderate-income families to cover the added costs of raising children while encouraging parents to work;
  
•  Earned Income Tax Credit (EITC): a federal tax credit for low- and moderate-income working people designed to encourage and reward work as well as offset payroll and income taxes.  Nearly 5 million adults and more than 8 million children would lose this benefit if Congress fails to make the improvement permanent;
• American Opportunity Tax Credit: The American Opportunity Tax Credit is available to millions of low- and moderate-income students. The maximum value is $2,500 and students can claim the credit for four years of education. 

The choice is clear— help working families or continue to provide tax cuts for the wealthy.