Taxes

You may have heard that House Speaker John Boehner (R-OH) has introduced a tax bill that is now being referred to as "Plan B" — that is, a backup plan of sorts if the negotiations with President Obama to resolve the "fiscal cliff" break down. The House is scheduled to vote on it tomorrow. But Plan B is a bad deal for women and their families. Here are the top five reasons why:

1. Plan B raises taxes for 25 million low- and moderate-income families. By ending important improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), and eliminating the American Opportunity Tax Credit (AOTC) for college expenses, Plan B takes tax benefits away from the families who need them most. NWLC has calculated that ending the improvements to the EITC and CTC would take $12.6 billion in tax credits from hardworking families — and women would bear two-thirds of those losses.

2. Plan B lets millionaires off easy. By keeping in place all of the Bush-era tax cuts on incomes up to $1 million and repealing tax expenditure limits for even the very highest earners, Plan B ensures that households with incomes over $1 million — the top 0.3 percent — still get tax cuts averaging $50,000 per year (compared with President Obama's proposal to end the Bush-era tax cuts on income above $200,000 for an individual or $250,000 for a couple).

An IRS report released the day before Thanksgiving shows that the very rich had something more to be thankful for. Tax rates fell in 2010 for every income group above $500,000. And the very wealthiest – those whose incomes exceeded $10 million in 2010 – saw the biggest drop in tax rates.

Taxpayers with incomes over $10 million paid an effective federal income tax rate of 20.7 percent in 2010, down from 22.4 percent in 2009. (The “effective” federal income tax rate refers to the percentage of adjusted gross income a taxpayer actually pays in federal income tax, after lower tax rates on certain kinds of income, deductions, exemptions, and credits are taken into account.) Taxpayers with incomes between $5 and $10 million paid an effective tax rate of 24.2 percent in 2010, down from 25.2 percent in 2009.

As a Wall Street Journal blog explains: “The reason for the drop in average tax rates [among the very wealthy] is no secret. It’s the special 15 percent top rates for capital gains and dividends that President George W. Bush pushed through.” Read more »

Whether served as a side dish or not, politics always seems to wiggle its way onto the Thanksgiving table. And because your family may not agree on everything (or anything), we want you to be as prepared for them as you are for the big meal.

And now that the election is over, the public debate is all about the so-called "fiscal cliff," which refers to the combination of tax cuts and numerous other provisions set to expire at the end of December plus a series of automatic spending cuts scheduled to begin in January.

Contrary to what some commentators might suggest, however, the economy won’t immediately fall into a recession if Congress doesn’t reach agreement on all of these issues by midnight on December 31. Indeed, real and lasting damage WILL be done if Members of Congress allow misguided fears to pressure them into a bad deal that cuts programs vital to women and families and fails to make the wealthiest among us pay their fair share in taxes.

To explain what this means for you – and for Aunt Edith – below are a few key myths and facts.

MYTH: If we raise taxes on the richest 2%, it will kill jobs.

FACT: We’ve seen that trickle-down economics doesn’t work. We had much stronger job growth after President Clinton raised taxes on the wealthiest Americans than after President Bush cut them. And, allowing the Bush-era tax cuts for the richest two percent to expire would generate nearly $1 trillion in savings. This much-needed revenue would allow us to call off the looming – and draconian – automatic cuts to programs that are also scheduled to take place. Plus, it would let us invest in human capital as well as physical infrastructure. When so many Americans can't find work, it's important to support programs that create good jobs and long-term economic growth. Read more »

As the year-end expiration date for the Bush-era income tax cuts draws nearer, taxes seem to be an increasingly hot topic. So far, however, some expiring tax provisions have largely escaped media attention. These include improvements to refundable tax credits, like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), that were enacted in 2009 as part of the American Recovery & Reinvestment Act (ARRA). These credits help low- and moderate-income families, millions of whom will lose benefits if the ARRA improvements are allowed to expire – as the tax plan proposed by Republican leaders in Congress would do, even as it maintains tax cuts for the richest two percent of Americans.

The $160,000 tax break that millionaires will receive if the Bush-era tax cuts are extended next year does not include the effect of another tax cut that also has remained mostly under the radar: the 2010 estate tax cut. If this tax cut is allowed to expire on schedule at the end of the year, and the federal estate tax reverts to its 2009 level as President Obama has proposed, 99.7 percent of estates will still be exempt from the tax. Read more »

The latest effort by the House Republican leadership is called “Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012” (H.R. 6169). That’s a misnomer.

This bill would provide for expedited consideration of tax reform legislation – but only on the condition that it include additional massive tax cuts for high-income households and corporations and leave behind millions of women and their families.

Under H.R. 6169, the current six-bracket personal income tax system would be replaced with just two rates, 10 percent and 25 percent (or less). But reducing the number of brackets won’t make it any simpler to file your taxes. The IRS – with or without your favorite tax prep software – already tells you how much tax you owe after you fill in the Form 1040 – you don’t have to muddle through the brackets yourself. There’s probably an app for that, anyway. But fewer brackets mean that our tax system is less progressive, because then taxpayers with extremely high earnings pay taxes at the same rate as those with lower earnings. “Simple” doesn’t necessarily mean “fair”. 

Like the 2013 Ryan budget, H.R. 6169 calls for large tax cuts for the very wealthy. In 2015, those making $1 million or more would enjoy an average tax cut of $265,000 (on top of what they would get from extending the Bush-era tax cuts). In contrast, those making between $20,000 and $30,000 would get an average tax cut of $129 from the tax cuts proposed in the Ryan budget and H.R. 6169, and half of the people in that lower income bracket would get no tax cut at all. Read more »

I’m at that time in life when lots of my friends are having kids. I’m thrilled for my friends - their kids are awesome and adorable. But one thing they’re not is cheap. And if Republicans have their way, kids are about to get even more expensive.

New analysis by the Tax Policy Center shows that the tax bill (H.R. 8) introduced by Rep. Dave Camp (R-MI) (a bill virtually identical to S. 3414 which was introduced by Senate Republican leaders and rejected by a majority of the Senate last week) ends tax cuts for millions of hard-working families. In fact, more than one-third of all families with children and nearly three-quarters of low-income families with children (who make an average of $17,400 a year) would lose valuable tax benefits under Rep. Camp’s bill. The loss would be particularly hard for women who are the majority of low-income parents.

Wonder why so many families will lose out under Rep. Camp’s tax bill? It, like the bill introduced by Senate Republican leaders, would end tax cuts for low- and moderate-income families that were put into place by the American Reinvestment and Recovery Act of 2009. The National Economic Council estimates that by letting these tax cuts expire:

• 12 million families would lose an average of $800 from the elimination of the Child Tax Credit expansion.
• 11 million families would lose an average of $1,100 from the repeal of the American Opportunity Tax Credit for college expenses.
• 6 million families would lose an average of $500 from the elimination of improvements to the Earned Income Tax Credit.

End Tax Cuts for the Richest 2%, Not Working Families

Tell your Representative to vote for tax fairness!

Call 1-888-744-9958 today!

Whew, that was a nail biter!

Last week, the Senate voted 51 to 48 to stand up for tax fairness. This week your Representative will cast a vote on two tax cut bills — one that would help millionaires and one that would help working families.

Demand Tax Fairness Now: Call 1-888-744-9958 and listen to easy instructions and a sample script.

H.R. 15, introduced by House Democratic leaders, would end Bush-era tax cuts that benefit only the richest 2% of Americans and extend improved tax credits for low- and moderate-income working families.

H.R. 8, introduced by Rep. Dave Camp (R-MI), would leave no millionaire behind by continuing Bush-era tax cuts for the richest 2% of Americans — and end improved tax credits for low- and moderate-income working families.

And here's the kicker. More than one in three families with children — and three out of four low-income families with children — would lose out under H.R. 8. Read more »

Did your Senators do the right thing?

Find out how your Senators voted on ending the Bush-era tax cuts for the richest 2 percent. And send them a quick message!

Yesterday, the Senate voted 51 to 48 to end the Bush-era tax cuts for the richest 2 percent of Americans. Ending these tax cuts would save $1 trillion over the next 10 years and help protect programs that are critical to women at every stage of their lives.

While some Senators did the right thing, others did not. Take two minutes to find out how your Senators voted and send them a message.

Our advocacy isn't done when the vote is tallied. We need to make sure your Senators know that you are watching their votes because this issue will come up again. Read more »

Stand Up for Tax Fairness

Call your Members of Congress at 1-888-744-9958 and tell them that it's time for the richest Americans to pay their fair share.

Call 1-888-744-9958 today!

It's go time!

In less than 24 hours Congress will start to vote on whether to end — or extend — the Bush-era tax cuts for the richest two percent.

Ending the Bush-era tax cuts on income above $250,000 per couple, as President Obama and Senator Harry Reid (D-NV) have proposed, would help restore fairness to the tax code and protect programs vital to women and their families. It would give 98 percent of Americans their full tax cuts next year.

And the wealthiest two percent would still receive tax breaks on their first $250,000! We simply can't afford to give even more tax breaks to those who need them least when so many women and families are struggling just to make ends meet.

Calling is easy. And only takes a couple of minutes. Dial 1-888-744-9958 and listen to easy instructions and a sample script. Read more »

Stand Up for Tax Fairness

Call your Members of Congress at 1-888-744-9958 and tell them that it's time for the richest Americans to pay their fair share.

Call 1-888-744-9958 today!

It's time for Congress to restore some fairness to the tax code. As early as next week, Congress will start to vote on whether to end — or extend — the Bush-era tax cuts for the richest two percent.

Extending the Bush-era tax cuts on income up to $250,000 per couple as President Obama has proposed would give 98 percent of Americans their full tax cuts next year. And the wealthiest two percent would still receive tax breaks on their first $250,000! We simply can't afford to give even more tax breaks to those who need them least when so many women and families are struggling just to make ends meet.

Call your Members of Congress at 1-888-744-9958 and tell them that it's time for the richest Americans to pay their fair share: we need to end the Bush tax cuts on income over $250,000. Read more »