Levin: GOP Plan a Tax Cut for Wealthy, Tax Hike on Middle Class

WASHINGTON – Ways and Means Ranking Member Sander Levin (D-MI) today made the following statement regarding the Joint Select Committee on Deficit Reduction:

"Contrary to what Republicans have sought to portray, the proposal by Sen. Toomey would have further lowered taxes on the very wealthy and increased taxes for a wide range of middle class families. Their plan to lower the top tax rate while not touching the two provisions that most narrowly help the highest earners – reduced rates for capital gains and dividends – virtually ensures the proposal would mean a massive tax cut for the highest earners. They would pay for it by significantly limiting tax provisions – such as the health care exclusion, education credit and mortgage interest deduction – whose benefits flow predominantly to middle income taxpayers. This is exactly the wrong approach. We should now be asking the very highest earners – not middle income taxpayers – to contribute more to deficit reduction through the tax code."

BACKGROUND:

The following Joint Committee on Taxation analysis provides a detailed distributional breakdown of many of the largest tax expenditures:

• Employer provided health benefits and deduction for self-employed health (2011 rates and incomes)
  • Below $100,000: 46%
  • $100,000-$200,000: 35%
  • $200,000 and above: 19%
• Mortgage interest deduction
  • Below $100,000: 31%
  • $100,000-$200,000: 39%
  • $200,000 and above: 30%
• State and local income, sales and personal property tax deductions
  • Below $100,000: 19%
  • $100,000-$200,000: 31%
  • $200,000 and above: 50%
• Charitable contributions deduction
  • Below $100,000: 19%
  • $100,000-$200,000: 26%
  • $200,000 and above: 55%
• Earned income credit
  • Below $100,000: 100%
  • $100,000-$200,000: 0%
  • $200,000 and above: 0%
• Child tax credit
  • Below $100,000: 90%
  • $100,000-$200,000: 10%
  • $200,000 and below: 0%
• Education Credits
  • Below $100,000: 81%
  • $100,000-$200,000: 19%
  • $200,000 and above: 0%
• Long-term capital gains (2011 rates and incomes)
  • Below $100,000: 5%
  • $100,000-$200,000: 7%
  • $200,000-$500,000: 9%
  • $500,000-$1 million: 8%
  • $1million-plus: 71%

• Qualified Dividends (2011 rates and incomes)
  • Below $100,000: 17%
  • $100,000-$200,000: 18%
  • $200,000-$500,000: 13%
  • $500,000-$1 million: 10%
  • $1million-plus: 41%

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