Millionaires have had a very good week. Women and their families have had a very bad week. It started Monday, when 45 Senators voted to block the "Paying a Fair Share Act" (S. 2230), which would have implemented the Buffett Rule by requiring households with incomes above $1 million to pay at least a 30 percent income tax rate. Tax revenues support programs vital to women and their families at every stage of their lives, and women pay the price when millionaires and billionaires avoid paying their fair share of taxes.
Millionaires have had a very good week. Women and their families have had a very bad week.
It started Monday, when 45 Senators voted to block the "Paying a Fair Share Act" (S. 2230), which would have implemented the Buffett Rule by requiring households with incomes above $1 million to pay at least a 30 percent income tax rate. Tax revenues support programs vital to women and their families at every stage of their lives, and women pay the price when millionaires and billionaires avoid paying their fair share of taxes.
Today, the House passed "The Small Business Tax Cut Act" (H.R. 9). The bill provides a 20 percent tax deduction in 2012 for businesses with fewer than 500 employees — not exactly your mom-and-pop store!
H.R. 9 would have more aptly been named the Giveaway to Millionaires Act. The Tax Policy Center estimates that taxpayers making over $1 million a year would receive nearly half of the windfall. Exactly how big is this tax break? The average millionaire would get a new tax break of $44,635 next year. The average benefit for low-income tax payers in the bottom fifth of the income distribution? Just $2. All while adding $46 billion dollars to the deficit over the next ten years.
The bill has been described as a measure to create jobs by aiding small businesses. But the Congressional Budget Office (CBO) rated this approach as one of the least cost-effective ways to create jobs. That's because businesses don't have to add any jobs to get the tax break, and the benefits of deducting a percentage of business income would flow disproportionately to high-income people — including wealth lobbyists, lawyers, and stock brokers — who already have what they need and thus spend a relatively small portion of any additional income they get. Resulting job creation would be minimal: an estimated zero to one job per $1 million in budgetary cost.
Today's House vote is particularly outrageous in the face of yesterday's votes in House committees to implement the Ryan budget by slashing critical programs, including deep cuts to SNAP (Food Stamps), which is the most effective way to boost economic growth and create jobs.
The House Agriculture Committee voted, along party lines, to cut SNAP by more than $33 billion over the next decade. SNAP currently feeds more than 46 million people a month. More than half of all SNAP beneficiaries are children; two-thirds of adult beneficiaries are women. The Food Research and Action Center said that this cut "will cause an estimated three million SNAP recipients to lose eligibility for SNAP benefits . . . and take free school breakfast and lunch away from more than 280,000 low-income children." The House Agriculture Committee could have saved money by cutting farm subsidies; they weren't touched.
The House Ways and Means Committee — which last week endorsed the H.R. 9 windfall for millionaires — yesterday approved cuts of about $53 billion to programs for women and families. The Committee voted, again along party lines, to: (1) create a financial barrier to accessing tax credits to help pay for health insurance under the Affordable Care Act; (2) limit eligibility for the refundable Child Tax Credit; and (3) eliminate the Social Services Block Grant.
The Affordable Care Act (ACA) protects individuals and families from excessive penalties if the yearly premium tax credit they received to help cover the cost of health insurance was higher than it should have been, by capping the amount that will have to be repaid by an individual or family under 400 percent of poverty. The Ways and Means Committee voted to eliminate this cap, leaving women who enrolled in coverage but had an income change mid-year — perhaps because of a new job or change in hours — vulnerable to an unaffordable tax bill. Hundreds of thousands might refuse health care coverage for fear of the repayment penalty.
The Child Tax Credit is designed to help families meet the costs of raising children. It is refundable for families with at least $3,000 in earnings, so that low-income families, disproportionately headed by women, can receive some benefit even though they have little or no federal income tax liability. The Committee voted to eliminate eligibility for the refundable portion of the credit for taxpayers filing with an Individual Tax Identification Number rather than a Social Security Number. Immigrant families, who already experience higher rates of poverty, would bear the brunt of this cut.
In 2009, the Social Services Block Grant (SSBG) funded services for over 22 million people, about half of whom were children. One of the largest service categories was child care — an essential service for low-income women to be able to enter and remain in the work force. The SSBG also funded child protective services and foster care, special services for people with disabilities and frail elders, and transportation and housing assistance. The Committee voted to completely eliminate the SSBG, at a time when record number of women and children are living in poverty and only one in six children who are eligible for federal child care assistance receives that help.
Incredibly, this is just the beginning. The Ryan budget calls for more tax breaks for millionaires and corporations and more cuts to programs vital to women and families, including Medicaid. Sign up to stay informed about these critical tax and budget battles — and find out what you can do to help.