— by Pat Garofalo on Dec 19, 2012 at 2:00 pm
Speaker of the House John Boehner (R-OH) yesterday released the Republican “Plan B” for averting the so-called “fiscal cliff”: a bill to allow the Bush tax cuts on income in excess of $1 million to expire. The White House has already said that President Obama would veto the bill if it ever reaches his desk, but House Republicans are forging ahead with a vote, claiming that their bill is a “net tax cut.”
Boehner’s website lays out the plan here, but leaves out some crucial details, which ThinkProgress provides below:
| House GOP Claim | Reality |
| Does not raise taxes. It is a net tax cut that prevents a $4.6 trillion tax hike on January 1 | In fact, by allowing several key tax credits to expire –including the expanded Child Tax Credit and a credit that helps with higher education tuition — Plan B would raise taxes on 20 million families. Also, allowing the current payroll tax cut to expire will affect every working American. As the Tax Policy Center noted, “Most low income and middle income families with children will see their taxes rise.” |
| Permanently extends income tax rate cuts for Americans making less than $1 million, which protects 99.81 percent of all taxpayers | This plan would raise just 15 percent of the revenue of Obama’s campaign proposal to allow the Bush tax cuts to expire on income in excess of $250,000. As Citizens for Tax Justice noted, “millionaires get 50 percent of the additional tax breaks from moving the threshold to $1 million.” |
| Permanently extends the current estate and gift tax ($5 million at 35 percent and indexed for inflation) | Keeping the estate tax at this level means that a miniscule 0.2 percent of estates will face the tax, costing the government billions in revenue every year. All of the benefit goes to the very wealthiest Americans. |
| Permanently extends parity for capital gains and dividend taxes, preventing dividend taxes from being taxed at the highest rates | Similar to the voter-rejected Romney tax plan, this would be another handout to the wealthy. President Obama has proposed allowing the Bush tax cut on dividends to expire for high-income earners. |
| Does not include anything on the debt limit or other non-tax policy items | This means that federal unemployment benefits will expire for two million workers, and gives the Republicans the opportunity to hold the debt limit hostage when it needs to be raised in a few months. |
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