FOR IMMEDIATE RELEASE:
Tuesday, March 6, 2001, 12:01 a.m. (ET)

CONTACT: Jim Jaffe, Michelle Bazie
(202) 408-1080

BUSH TAX PLAN LEAVES OUT THIRD TO HALF OF CHILDREN IN MANY STATES

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State-by-state
fact sheets

State-level contacts

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One-third to one-half of the children in many states live in families that would not receive any tax reduction from the President's tax proposal, according to a new analysis from the Center on Budget and Policy Priorities, a Washington, D.C. policy institute. In 12 states plus the District of Columbia, at least 40 percent of children live in such families.

The analysis uses Census Bureau data to estimate, on a state-by-state basis, the number of families and children under age 18 who would receive no tax relief from the Bush plan because these families' incomes are too low for them to owe federal income taxes. The large majority of these families, however, work and pay payroll taxes and other taxes unaffected by the Bush proposal. The Bush plan reduces only income taxes and taxes on large estates.

Nationwide, an estimated 12.2 million low- and moderate-income families with children — 31.5 percent of all families with children — would not receive any tax reduction from the Bush proposal. This finding is consistent with independent analyses conducted by researchers at the Brookings Institution, the Urban Institute, and the Institute on Taxation and Economic Policy. The vast majority of the excluded families include workers.

"Substantial numbers of children in every state would be left out of the President's tax plan," said Nick Johnson, who co-authored the report with Allen Dupree and Isaac Shapiro. "Furthermore, some states would have especially high numbers of unaffected children." These states include California (3.7 million children unaffected), Texas (2.3 million), New York (1.9 million), and Florida (1.2 million). In each of another eight states — Arizona, Georgia, Illinois, Michigan, North Carolina, Ohio, Pennsylvania, and Tennessee — families with at least half a million children would gain nothing from the Bush tax plan.

Among the states where the highest percentages of families and children would not benefit from the plan are Arizona, Arkansas, California, Georgia, Louisiana, Mississippi, Montana, New Mexico, North Dakota, Texas, and West Virginia, plus the District of Columbia. In each of those states, an estimated 40 percent to 52 percent of children live in the excluded families.

Even the part of the Bush tax plan that would double the child tax credit would leave out these families, while providing the largest tax reductions to families with incomes between $110,000 and $250,000. The Bush proposal extends the credit to many families with high incomes who currently receive no credit at all — for example, by raising the maximum income a married couple with two children can earn and still receive the credit from $130,000 to $300,000. Yet the proposal does not extend the credit to any additional low- or moderate-income working families.

Why Benefit Families Who Don't Owe Federal Income Taxes?

Some argue that families who do not owe federal income taxes should not benefit from the tax plan. This argument has several flaws, according to the Center's report:

An alternative to the President's tax proposal — one that scaled back (but did not eliminate) the benefits to those at very high income levels and provided tax reductions to low- and moderate-income families with children as well — could be fashioned for a much smaller cost than the Bush plan. Such an approach would ensure that the rewards from the surplus are more broadly distributed throughout the population and also leave resources for other critical needs that would remain largely unaddressed under the Bush budget.

The full text of this analysis, In Many States, One-Third to One-Half of Families Would Not Benefit from Bush Tax Plan, is available at the Center's website, </cms/index.cfm?fa=view&id=1783>. Fact sheets also have been prepared for each state, they are posted to </cms/index.cfm?fa=view&id=147>.

Attached is a list of state groups with expertise in the impact of tax policies on low- and moderate-income families. These groups are available for comment on the Center's report.


Impact of Bush Tax Plan on Families and Children
State Group Contact List

ALABAMA
Arise Citizens’ Policy Project
Kimble Forrister
334-832-9060
KENTUCKY
Kentucky Youth Advocates
Doug Hall
502-875-4865
NEW YORK
Fiscal Policy Institute

Frank Mauro
518-786-3156
ARIZONA
Children’s Action Alliance
Elizabeth Hudgins
602-266-0707
MAINE
Maine Center for Economic Policy
Christopher St. John
207-622-7381
NORTH CAROLINA
North Carolina Budget & Tax Center

Dan Gerlach
919-856-2158
ARKANSAS
Arkansas Advocates for Children & Families
Richard Huddleston
501-371-9678
MARYLAND
Maryland Budget & Tax Policy Institute
Steve Hill
301-565-0505, ext. 14
OREGON
Oregon Center for Public Policy
Chuck Sheketoff
503-873-1201, ext. 331
CALIFORNIA
California Budget Project
Jean Ross
916-444-0500
MASSACHUSETTS
TEAM Education Fund
Jim St. George
617-426-1228 ext. 102
TENNESSEE
Tennessee Budget Project
Tunya Bails
615-385-2221
COLORADO
Colorado Fiscal Policy Institute

Adela Flores
303-573-5669
MICHIGAN
Michigan League for Human Services
Sharon Parks
517-487-5436
TEXAS
Center for Public Policy Priorities
Eva DeLuna Castro
512-320-0222
IDAHO
United Vision for Idaho
Judy Brown
208-882-0492
MINNESOTA
Minnesota Budget Project
Nan Madden
651-642-1904 x30
or 612-539-8742
WASHINGTON
Fiscal Policy Center, University of Washington
Chris Haugen
206-543-0190
ILLINOIS
Voices for Illinois Children
Jerome Stermer
312-516-5550
NEW JERSEY
Association for Children of New Jersey
Jeannette Russo
973-643-3876
WISCONSIN
Wisconsin Budget Project
Jon Peacock
608-284-0580 ext. 307

The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.

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