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Minnesota Budget
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Minnesota Taxes
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Federal Tax & Budget
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Minnesota Budget Bites
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ABOUT USThe Minnesota Budget Project is an initiative of the Minnesota Council of Nonprofits.
Bush Tax Plan Resource PageThe following are resources you can use to become further informed about President Bush's 2001 tax cut proposal:
This seven-page analysis by Citizens for Tax Justice points out that Bush's proposed tax cuts would result in states losing approximately $35 billion in tax revenues by 2012. The proposed repeal of the estate tax would eliminate the "pickup tax," where the federal government gives states about 26 cents for each dollar paid by the state's residents in estate tax. Repealing the estate tax would also allow wealthy taxpayers to avoid paying income taxes on some capitol gains, interest and dividends. Finally, the Bush tax plan would reduce federal tax benefits from state and local tax deductions, making it more difficult for state and local governments to impose income and property taxes because they would be more of a burden on taxpayers. Bush Tax Cut Proposal Leaves Out Many Working Families, Minnesota Budget Project, Revised April 2001 This three-page fact sheet describes how one in five Minnesota families would receive no tax relief, briefly describes the proposal, and shows how different income groups would be affected. An Estimated
134,000 Low- and Moderate-Income Families in Minnesota — With
297,000 Children — Would Not Benefit from Bush Tax Plan,
Center on Budget and Policy Priorities, March 6, 2001 This one-page fact sheet describes the characteristics of Minnesota families left out of the Bush tax plan, and why they are excluded. The full report looking at all fifty states is also available. General Distribution and Impact of Tax CutsHouse GOP's Version of Second Part of Bush Income Tax Cuts is On-Track with President's Proposals, Citizens for Tax Justice, March 22, 2001 This report provides a brief written summary and table describing how the Bush and the House Republican tax cut proposals would effect families at different income levels. CTJ Analysis of Bush Plan Updated to 2001 Levels, Citizens for Tax Justice, February 28, 2001 This brief piece from Citizens for Tax Justice examines the distributional impact of President Bush's tax plan at 2001 income levels (most other analyses have used 1999 levels). It includes tables detailing the effects of the tax plan by income level and by demographic characteristics. Bush Tax Plan Offers No Benefits to One in Three Families, Center on Budget and Policy Priorities, February 7, 2001 This one-page summary fact sheet describes who is left out of the Bush tax plan and why they would not benefit. The full report is also available. Bush Tax Cut Delivers the Most to the Top of the Income Spectrum, No Matter How it's Measured, Center on Budget and Policy Priorities, February 7, 2001 This one-page summary fact sheet explains how high-income families, especially the richest one percent of the population, would benefit most from the Bush tax plan. The full report is also available. Taking Down the Toll Booth to the Middle Class? Myth and Reality Governing the Bush Tax Plan and Lower-Income Working Families, Center on Budget and Policy Priorities, February 6, 2001 This longer analysis looks at whether the Bush tax plan would benefit low-income families as the President has claimed. The authors argue that the plan does not provide any significant tax relief to low-income families. Most low-income families would not benefit from the plan because their tax burden comes from payroll taxes, not income taxes. Therefore, eliminating income taxes would not really provide any tax relief. Furthermore, since low-income families do not have enough tax liability, they would also be unable able to take advantage of the proposed increase in the child tax credit.
This three-page report looks at the cost of the Bush tax plan as modified by the House Ways and Means Committee. Although the Committee has only considered four major components of the Bush tax package, the cost has already risen to $1.3 trillion over 10 years. This leaves only $310 billion for the other tax proposals before costs hit the agreed on cap of $1.6 trillion. The report also includes an appendix summarizing Congressional action to date . How to Avoid Over-Committing the Available Surplus: Would a Tax-Cut "Trigger" be Effective or is There a Better Way, Center on Budget and Policy Priorities, March 16, 2001 This seven-page summary of a longer report examines two strategies that would prevent proposed tax cuts and spending increases from leading to future deficits. The first method, a "trigger," would use automatic spending cuts that would kick in if the budget projections turn out to be overly optimistic. The author provides several reasons why this is not an effective strategy for preventing deficits. He favors the second approach, a budget reserve, where Congress would only use up some of the projected surplus and wait until the future surplus materializes before enacting further tax cuts or program increases. The full report and a fact sheet are also available. New Joint Tax Committee Estimates Raise Cost of Bush Tax Plan: Cost Now Well Over $2 Trillion, Center on Budget and Policy Priorities, March 6, 2001 This three-page release discusses new cost estimates by the Joint Tax Committee that now place the cost of the Bush tax plan at $2.2 trillion (up from $2.0 trillion). Another analysis by the Joint Tax Committee finds that unless the Alternative Minimum Tax (AMT) is changed, one out of every three taxpayers will become subject to this complicated and increased tax burden by 2011. Adding the cost of fixing the AMT, nearly $300 billion, raises the cost of the Bush tax plan to $2.5 trillion over 10 years. Testimony of Robert Greenstein on Bush Administration Tax Proposal Before the House Committee on Ways and Means, February 13, 2001 Greenstein's testimony outlines how the Bush tax plan would actually cost approximately $2.4 trillion, rather than the widely used figure of $1.6 trillion. Furthermore, Greenstein argues the available surplus over the next 10 years is closer to $2.0 trillion than the CBO's forecast of $3.1 trillion. Greenstein also points out that the Bush tax plan would only begin to help families with incomes above 150 percent of the poverty line. He also criticizes the Bush plan for failing to solve the problem of marginal tax rates for low-income families.
This shorter article points out that the Congressional Budget Office, the Office of Management and Budget, and Federal Reserve Chairman Alan Greenspan all suggest that surplus projections are only projections, and the there is always the possibility that the government may actually face deficits, not surpluses, in the next ten years. Is the Bush Tax Cut Necessary to Avoid a Recession?, Center on Budget and Policy Priorities, February 22, 2001 This shorter article suggests several reasons why a tax cut would not be an effective means of averting a recession.
This is an in-depth analysis of the tax proposal from Rep. Bill Thomas of the House Ways and Means Committee. Although this plan does take steps to help lower income working families by extending the child credit to some families that do not pay income tax and attempts to provide some marriage penalty tax relief, the authors argue that the plan still falls short of providing significant relief to the working poor. The proposal also fails to address the high marginal tax rates that face low-income families. Furthermore, the House proposal costs $115 billion more over 10 years than Bush's child credit and marriage penalty provisions. A Tax Proposal for Working Families with Children, The Brookings Institution, January 2001 This policy brief explains some of the shortcomings of Bush's proposed changes in the child tax credit and offers an alternative plan that would also double the size of the credit, but would maintain current phase-out thresholds and make the credit partially refundable for families earning at least $8,000 annually (which is equivalent to 30 hours a week, 50 weeks a year, at minimum wage). Updated March 27, 2001 |
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