TWO TAX CUTS THAT BENEFIT ONLY HIGH-INCOME HOUSEHOLDS

TWO TAX CUTS THAT BENEFIT ONLY HIGH-INCOME HOUSEHOLDS —PRIMARILY MILLIONAIRES — SLATED TO START TAKING EFFECT IN 2006: Will These Tax Cuts be Implemented While Basic Programs for the Working Poor and Other Families are Cut?
By Robert Greenstein, Joel Friedman, and Isaac Shapiro
Center on Budget and Policy Priorities

The President’s budget contains reductions in an array of domestic programs, including programs in the education, health care, housing, veterans, and various other areas. The budget debate now moves to Capitol Hill. There has been no discussion, however, in the Administration or Congress of another potential way to reduce projected deficits — canceling or deferring two significant tax cuts enacted in 2001 that have not even yet started to take effect and that will benefit only households with high incomes.

• 
  These provisions will only be fully effective in 2010. The Joint Committee on Taxation estimates that they will reduce revenues by $9 billion in 2010, rising to $16 billion in 2015. The ten-year cost of these provisions when they are fully in effect (2010 through 2019) would be $146 billion.[1] When the associated interest payments on the national debt of $51 billion are added in, the cost rises to $197 billion over this ten-year period.