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.

After Mitt Romney’s comments about the “47 percent” brought the notion of a dependent class of non-taxpaying Americans to the fore of American political discourse, it was almost inevitable that someone would propose a minimum federal income tax. Former Governor and Senate candidate Tim Kaine (D-VA) did it today, saying, “I would be open to a proposal that would have some minimum tax level for everyone” in a televised debate.

But this idea, also raised by Rep. Michelle Bachmann (R-MN) as a solution to the “problem” of 47 percent of Americans not paying federal income tax, would work against the design of several bipartisan anti-poverty tax initiatives. Almost all of the 47 percent that don’t pay federal income tax are either elderly, federal payroll taxpayers, or adults with incomes under $20,000, and most of them pay plenty of other taxes at the federal and state level.

The reason these groups don’t pay income taxes is straightforward: it helps keep them out of poverty and capable of providing for themselves and their families. The centerpiece of the tax reform that brought about this state of affairs is the Earned Income Tax Credit (EITC), which provides tax relief for families that make under $36,000 and individuals that make under half that.

This bipartisan tax credit, hailed by President Reagan as “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress,” is the central mechanism allowing working families to buy necessities and stay out of poverty. The effect has been an estimated 3 million less impoverished children per year. The benefits of the EITC have been magnified in recent years by the greater need generated by the Great Recession:

Moreover, the tax breaks that benefit the 47 percent in no way foster a culture of “dependency” on the federal government. The EITC has been “more important than welfare reforms” in moving low-income Americans into the workforce and improving poor students’ performance in school. The Center on Budget and Policy Priorities’ summary of research on the EITC found evidence suggesting “[m]ost EITC recipients claim the credit only temporarily when a job disruption or other significant event reduces their income.” The majority of EITC recipients use it for only one or two years and “EITC recipients as a whole pay far more in federal income taxes than they receive in EITC benefits.”

A central premise of Mitt Romney’s now infamous speech to a room full of wealthy donors is that nearly half of the country relies heavily on the government for assistance with housing, food, and health care. Despite widespread criticism, Romney has stood by his claim that 47 percent of the country are “victims” who are “dependent upon the government.”

But while Romney decries the direct government programs that benefit lower and middle class Americans, he is silent about the plethora of government tax breaks that richer Americans enjoy. As an independent study by the Tax Policy Center found, the other 53 percent receive their own form government assistance: they disproportionately benefit from the federal government’s $1.08 trillion annual allocation for tax breaks:

The top 1 percent of income earners, those who take home in excess of $400,000 a year, account for almost a quarter all tax breaks, saving more than $250 billion a year in taxes. Meanwhile, the bottom 60 percent of wage earners — a group of people that encompasses 99 percent of the “victims” that Mitt Romney describes — are given just over 20 percent of annual tax breaks, or approximately $217 billion in breaks each year.

The U.S. Census Bureau’s annual poverty estimates, released today, found that the poverty rate remained stable in 2011 after three consecutive years of rapid increases during and after the Great Recession. But 46.2 million Americans still live in poverty, defined as less than $23,000 in annual income for a family of four.

The data also noted that government benefits played a significant role in keeping millions of Americans — particularly women, children, and the elderly — out of poverty. Social Security alone kept roughly 21.4 million people out poverty, and unemployment benefits helped an additional 2.3 million stave off poverty last year alone.

The Census Bureau estimates it poverty rate based on cash income and assistance, but many government programs, like the Supplemental Nutrition Assistance Program (SNAP) and certain tax credits aimed at combating poverty, aren’t included in its income estimates. Including SNAP, commonly known as food stamps, in the Census data would lift another 3.9 million Americans out of poverty, and including the Earned Income Tax Credit that helps low-income taxpayers would bring 5.7 million people above the poverty line. Other tax credits aimed at low-income working families, like the Child Tax Credit, would keep millions more out of poverty if they were included.

This chart from Melissa Boteach, the director of the Poverty to Prosperity program at the Center for American Progress, breaks down how many Americans avoided poverty thanks to certain government programs:

Many of these programs, however, are facing cuts as Congress attempts to reduce the federal budget deficit and national debt. The House Republican budget included massive cuts to SNAP and other food assistance programs; all told, it could have booted millions of people off of food stamps and 280,000 from the school lunch program. Under tax plans put forth by both House and Senate Republicans, meanwhile, 12 million Americans would have lost part or all of the Child Tax Credit, while six million would have lost part or all of the Earned Income Tax Credit, an effective tax hike on millions of families.

Among the many other policies it enacted, 2009′s American Recovery and Reinvestment Act (a.k.a. the stimulus) included provisions that provided over $11 billion in tax credits to low and moderate-income families. These policies were extended late last year, but the new Republican tax plan introduced by Sen. Orrin Hatch (R-UT) and Senate Minority Leader Mitch McConnell (R-KY) would allow them to expire at the end of 2012. A new report from Citizens for Tax Justice breaks down the details:

The child tax credit: The ARRA dropped the amount of income a household must earn to qualify for this credit — which provides any household as much as $1,000 per child — from $12,500 down to $3,000. The Hatch-McConnell plan would let this extension expire, jacking up the threshold to $13,300 next year. This would deny 8.9 million working families, with 16.4 million children, a total of $7.6 billion in assistance for 2013 alone.

The Earned Income Tax Credit: Most families that qualify for this credit have at least one child. The ARRA increased it specifically for families with three or more children, from 40 percent to 45 percent of their qualifying income. Above a certain level of income, the credit phases out, but the ARRA also pushed that phase-out back to a higher level for married couples. The Hatch-McConnell plan would allow both of these changes to expire as well, for a total loss of $3.4 billion for 6.5 million families with 15.9 million children.

Virtually all of the money from these tax credits go to families earning less than $50,000 a year. They provide a total of $11.1 billion to 13.1 million working families with 25.7 million children. And they would all be scrapped should the GOP tax plan go into effect.

Today is Tax Day, the day on which federal and state income tax filings are due for all Americans. The complexity of the tax code makes filing taxes a headache for most individuals, who have to root through the various deductions and credits they may be eligible for.

The government spends $1.3 trillion on various tax expenditures each year, enough to fill the entire deficit in President Obama’s latest budget proposal. And while some of the popular tax credits have real benefits for low- and middle-income Americans, the vast majority of the breaks go to the wealthy. In all, tax expenditures provide an extra quarter-million dollars a year for individuals in the top 1 percent of income-earners, according to economists Betsey Stevenson and Justin Wolfers:

Even as many areas of government spending have been cut to the bone, our tax code remains larded up with expenditures that cost taxpayers $1.3 trillion every year. According to the nonpartisan Tax Policy Center, the biggest tax expenditures apply to employer-provided health insurance, pension contributions and mortgages.

Popular as such tax breaks may be, they differ from typical government spending in that they give bigger subsidies to wealthier families. [...] Taken together, individual income tax expenditures are the equivalent of sending $686 each year to those in the bottom fifth of the income distribution, $3,175 to those in the middle fifth, and $30,714 to those in the upper fifth. The average member of the top 1 percent gets nearly a quarter of a million dollars a year — a statistic that might have proved useful for the folks protesting in Zuccotti Park.

President Obama and Senate Democrats proposed the Buffett Rule, a minimum tax on millionaires, and fought to close other tax breaks that benefit the wealthiest Americans. Meanwhile, the budget authored by Rep. Paul Ryan (R-WI) and passed by House Republicans would supposedly pay for massive tax breaks for the wealthy by ending unspecified tax expenditures, but the GOP won’t explain which breaks they have in mind.

The GOP spent the last year making the case that the nation’s tax code unfairly benefits the low- and middle-income Americans, pushing the myth that half of Americans don’t pay any taxes. But as Stevens and Wolfers note, the fact that tax expenditures disproportionately benefit the top 1 percent makes it easy to “come to the mistaken conclusion that our tax code is more progressive than it actually is.”