You may have heard that House Speaker John Boehner (R-OH) has introduced a tax bill that is now being referred to as “Plan B” — that is, a backup plan of sorts if the negotiations with President Obama to resolve the “fiscal cliff” break down. The House is scheduled to vote on it tomorrow. But Plan B is a bad deal for women and their families. Here are the top five reasons why:
Plan B raises taxes for 25 million low- and moderate-income families. By ending important improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), and eliminating the American Opportunity Tax Credit (AOTC) for college expenses, Plan B takes tax benefits away from the families who need them most. NWLC has calculated that ending the improvements to the EITC and CTC would take $12.6 billion in tax credits from hardworking families — and women would bear two-thirds of those losses.
Plan B lets millionaires off easy. By keeping in place all of the Bush-era tax cuts on incomes up to $1 million and repealing tax expenditure limits for even the very highest earners, Plan B ensures that households with incomes over $1 million — the top 0.3 percent — still get tax cuts averaging $50,000 per year (compared with President Obama’s proposal to end the Bush-era tax cuts on income above $200,000 for an individual or $250,000 for a couple).
- Plan B provides a huge tax cut for the wealthiest estates. Plan B calls for extending the estate tax cut enacted in 2010, which benefits only the wealthiest three in 1,000 estates and is worth an average of $1.1 million for the estates that receive it.
According to the Center on Budget and Policy Priorities, in Speaker Boehner’s home state of Ohio, just 140 estates — the wealthiest one-tenth of one percent (0.1 percent) — would benefit from the estate tax cut in Plan B, while almost 500,000 working families (including nearly one million children) would see their incomes drop if the EITC and CTC improvements expire. Nationally, CBPP estimates that only 7,450 (extremely rich!) people would benefit from the estate tax cut in Plan B, while ending improvements to the CTC and EITC would reduce the incomes of 13 million working families (in addition to the millions who would lose tax benefits if the AOTC is eliminated).
Plan B doesn’t raise enough revenue. The Bush-era tax cuts have been a major driver of the federal deficit; we can’t afford to keep them in place for the highest-income Americans. But Plan B loses about $400 billion in revenue from high-income households compared to the middle class tax cuts bill passed by the Senate earlier this year — and about 70 percent of that lost revenue would go to households making more than $1 million.
- Plan B doesn’t address the other pieces of the “fiscal cliff.” For one thing, Plan B allows federal emergency unemployment benefits to expire for more than two million people at the end of this month, cutting off a lifeline for jobless workers and their families. The plan also does nothing to avoid the automatic cuts scheduled to begin in January, which means programs women and their families depend on — such as Head Start, child care, and women’s health services — could be slashed dramatically, cutting jobs and services for millions.