Mitt Romney’s tax plan would provide millionaires with a tax cut of $87,000, even under the very generous assumption that the plan will be paid for (which would require raising taxes on middle class families). At the same time, Romney calls for rolling back expansions of two important tax credits aimed at helping middle-class and low-income families.
First, Romney’s plan calls for repealing an expansion of the Earned Income Tax Credit, meaning that “a two-parent family raising three children on $30,000 of earnings would lose $1,076 a year.” Romney also wants to roll back an expansion of the Child Tax Credit that was included in the 2009 Recovery Act. As the Tax Policy Center explained, “the more generous refundability level enacted in 2009 is critically important for low-income families“:
Of the $38.3 billion in total child credits that TPC estimates families will claim this year, $29.5 billion comes from the 2001 tax law and another $8.8 billion from the 2009 stimulus. Most of the 2001 increase will go to families in the middle income quintile and higher (see chart). Families with the lowest incomes will get less than 3 percent of the 2001 increase. In contrast, fully 60 percent of the benefits from the 2009 changes will go to families in the lowest income quintile.
Of the total $8.8 billion, about $5.3 billion goes to families in the poorest 20 percent of the country. If the expansion expires, “working families earning less than about $13,350 would be ineligible for any child credit, and families with two children wouldn’t qualify for the full credit until their earnings surpass $26,683.” In 2010, the expansion of the Child Tax Credit kept one million people out of poverty.