This election season will produce starkly different proposals for fixing the economic problems faced by our nation. As the National Women's Law Center notes, GOP Senate Leader Mitch McConnell, who hopes to become the majority leader after the November elections, has offered up a budget proposal that would further rip at the fabric of the common good in America:
(Washington, D.C.) The National Women’s Law Center (NWLC) today released an analysis of the tax bill introduced September 13, 2010 by Senate Minority Leader Mitch McConnell, which shows that the bill would leave many lower-income women and their families out of his proposed tax cuts. McConnell’s bill extends all of the Bush-era tax cuts, including provisions that benefit only the highest-income taxpayers, and permanently reduces the estate tax for the heirs of multimillionaires. However, unlike President Obama’s plan, McConnell’s bill does not extend recent improvements in the Child Tax Credit and Earned Income Tax Credit that expire at the end of this year.
“The McConnell plan is insulting to women,” said Nancy Duff Campbell, NWLC Co-President. “Over thirty percent of single moms struggling to support their families will get absolutely nothing, while millionaires will get average tax breaks of over $100,000 next year.”
In 2009, Congress approved improvements to the Child Tax Credit and Earned Income Tax Credit (EITC) to reward work and strengthen families. Like the Bush-era tax cuts, these tax changes will expire at the end of 2010 unless Congress acts to extend them.
The improvement to the Child Tax Credit allows more of a family’s income to be counted toward the credit. Without it, the first $12,850 of family earnings would not count toward the credit in 2011. For a single mom with two children, working full-time at the minimum wage for $14,450, McConnell’s exclusion of the Child Tax Credit improvement would means a loss of nearly $1,500 from this credit. For a single mom with slightly lower earnings of $12,500, McConnell’s bill would mean she gets nothing from this credit.
The improvements to the EITC in 2009 increased the EITC for families with three or more children by up to $629 per year and reduced the marriage penalty this credit can otherwise impose when two low-earning parents marry.
An analysis [http://www.nwlc.org/sites/default/files/pdfs/mcconnelltaxplananalysis.pdf] by NWLC calculated what the impact of the McConnell bill would be on low- and moderate-income families, especially those headed by single mothers:
- 12.9 million taxpayers would lose nearly $8.4 billion from the Child Tax Credit, and 98 percent of this loss would be to families with low to moderate incomes (in the lowest two-fifths of the income distribution).
- 11.7 million taxpayers would lose nearly $3.2 billion from the EITC, and 91 percent of this loss would be to families with low to moderate incomes (in the lowest two-fifths of the income distribution).
- Over 30 percent of single mothers would get nothing.
- NWLC also calculated the specific impact for many states, available at [http://www.nwlc.org/sites/default/files/pdfs/mcconnellimpactstatechart.pdf].
“Women are struggling to support their families in these tough times, and it’s shocking that some in Congress would make their lives even harder,” Campbell said. “One-third of working mothers are the sole wage-earners in the family because their spouse isn’t working or because they are heads of households. Women still earn less than men. And yet this tax plan would take money away from hard-working parents and give over $1 trillion in more tax breaks to millionaires.”
Under the McConnell bill, households with incomes above $1 million would get average tax cuts of nearly $104,000 next year, not including the added benefits they would receive from his permanent reductions in the estate tax.
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