More Tax Cuts for the Wealthy
Expect reports of cutbacks on education, healthcare, and first-responders to follow...
The House is expected to consider the Ways and Means Committee tax-cut reconciliation bill this week. The bill would cost $56 billion over five years and provide a two-year extension of the capital gains and dividend tax cuts, starting in 2009. But three additional tax-cut proposals have also been added to this week's House schedule: a one-year extension of relief from the Alternative Minimum Tax, costing $31 billion; tax incentives for Gulf Coast states affected by Hurricane Katrina, expected to cost about $7 billion; and a package of five small tax provisions that were not included in the reconciliation tax bill.
Together, these four tax-cut bills would likely cost a total of at least $90 billion over the next five years. Because the capital gains and dividend tax cuts continue to lose revenues outside the five-year window covered by reconciliation, the cost of these tax-cut measures would likely exceed $115 billion over ten years.
These tax cuts would significantly benefit upper-income households. More than three-quarters of the overall tax-cut benefits from these different measures -- some $70 billion over five years -- would go to households with incomes above $100,000, a group that makes up 14 percent of all U.S. households. And households with incomes over $1 million would receive an average tax cut of $32,000 in 2009 from the capital gains and dividend tax cut alone.