Congress’ ‘Fiscal Cliff’ Hurts Poor In Worse Ways Than Rich

Tax credits that help middle class and poor families will expire without lawmakers’ action

Our senators and representatives have important work to do in the coming weeks, regardless of the outcome of next week’s presidential election. On Dec. 31, the Child Tax Credit, Earned Income Tax Credit, and American Opportunity Credit (for college tuition) will expire for all Americans. That amounts to an average $209 tax increase or a 1.9 percent reduction in after-tax income on the poorest 20 percent of Americans, according to the Tax Policy Center. In comparison, if the Bush Tax Cuts are allowed to expire, the top 40 percent of American earners – currently benefitting from cuts to income, capital gains and estate taxes – would see a mere 0.1 percent drop in after-tax income. Political analysts and advocates for the poor expect a bitterly partisan fight over the Bush era tax cuts and the impact on the richest Americans, whom conservatives have argued would be discouraged from creating jobs. (Washington Post)

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