Congress is set to address the tax rates of every American this year with the focus on whether or not to extend tax cuts enacted in 2001 and 2003 under President Bush. President Obama has proposed an extension of those tax cuts that affect 98 percent of Americans. Under his proposal the tax rate for America’s highest earners – those making more than $250,000 annually – would return to Clinton Era rates. President Obama also proposes a permanent extension of the modifications made to the refundable Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) which were part of the American Recovery and Reinvestment Act.
Some in Washington believe tax cuts should be extended for the wealthiest Americans, specifically the wealthiest 2 percent of the population. This extension would have very little benefit for working Americans. Under this plan the bottom 60% of Arkansas taxpayers would pay $154 more in taxes – on average – in 2011 then they would pay under President Obama’s proposal. Meanwhile the richest 1percent of Arkansans would see a tax reduction of $27,520 in the same year.
Extending tax cuts for working families puts more money in the pockets of people who need the money to pay bills, putting money right back into the economy. Extending tax cuts for the wealthiest Americans will only add to the federal deficit, saddling the children of working families with even more national debt.
For more detailed information on what the different proposals mean to Arkansas taxpayers, visithttps://www.ctj.org/bushtaxcuts2010art/ar.pdf