A mere 7,450 of the wealthiest estates in the country could receive an average tax break of $1.1 million in 2013, while over 13 million low-income families could see their tax burden increase by $1,000 or more, if proposals by the GOP were to go into effect, according to the Center On Budget and Policy Priorities. The legislation, drawn up by Senate Republicans and already passed by House Republicans, would preserve through next year a cut to the estate tax that was enacted in the December 2010 tax deal. Meanwhile, it would allow expansions of the Earned Income Tax Credit and the Child Tax Credit passed in that same deal to expire.
As the CBPP noted today, the asymmetry in who would and would not benefit from these proposals, and by how much, is striking:
Relative to the 2009 estate-tax parameters, the estate-tax break enacted at the end of 2010 benefits only the heirs of estates that have assets in excess of $3.5 million for an individual and $7 million for a couple.
For the estates that receive it, the estate-tax break enacted in 2010 is worth an average of $1.1 million per estate, relative to the 2009 parameters, according to the Tax Policy Center. […]
For many lower-income working families, the impact of losing the tax-credit improvements would be substantial. For instance, a married couple with three children that has earnings at the estimated poverty line for 2013 ($27,713 for a family of that size) will receive $1,934 less in combined CTC and EITC benefits next year if policymakers let the improvements expire. Similarly, a single mother with two children working full time at the minimum wage — and earning about $14,000 — will receive a CTC of just $173 in 2013 instead of $1,725.
The cost of continuing the EITC and CTC through 2013 comes out to $3.4 billion and $7.6 billion respectively, for a total of $11 billion. The cost of the estate tax cut for its original two year period was $23 billion, suggesting an extension for another year would roughly equal the cost of extending the tax credits.
In short, the Republicans are proposing to recoup new revenue by raising taxes on 13 million American families, while losing roughly the same amount of revenue in order to give a minute, rarified group of the wealthiest Americans another year of enormous tax cuts.