Analysts say ending Bush tax cuts for rich will save $28B

Jul 19 2012 - 4:47pm

A Republican proposal to preserve tax cuts for the nation's wealthiest taxpayers would cost $28 billion more next year than would a Democratic proposal to extend the cuts solely for middle-class taxpayers, congressional tax analysts said Thursday.

A new report from the nonpartisan Joint Committee on Taxation shows that a measure introduced by Senate Republicans to extend the George W. Bush-era tax cuts for all Americans for one year would cost about $300 billion. A competing Democratic measure, which would extend the tax cuts only on income under $250,000, would cost about $272 billion.

Democrats have threatened to let all the Bush tax cuts expire on schedule in December unless Republicans abandon their push to preserve the cuts for taxpayers in the top brackets. With the release of the new cost estimates, Sen. Orrin Hatch (R-Utah) questioned the wisdom of that position.

"The American people deserve better than to have the President and his allies threaten to melt down our economy for what amounts to less than three days of federal spending," said Hatch, the senior Republican on the Senate Finance Committee. "With 41 consecutive months of unemployment over 8 percent, it just makes sense to extend this tax policy for a year so we can enact meaningful, pro-growth tax reform."

Democrats countered that their measure was made more expensive by the addition of a variety of new middle-class tax cuts, including a credit for college tuition and an expanded credit for the working poor.

Besides, they said, the one-year savings from ending the tax cuts for the rich may not be much, but it would accumulate over time, bringing an estimated $800 billion into the U.S. Treasury by the end of the decade.

"Over 10 years, which is how we hope to do a major budget bill, it would save a lot more money," said Sen. Charles Schumer (D-N.Y.).

 

 

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