Many Middle-Class Families Likely To Wind Up As Net Losers From The "Middle-Class" Tax-Cut Legislation

Publication Date: September 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Isaac Shapiro; Robert Greenstein

Research Area: Banking and finance; Economics

Keywords: Income diversity; Household income; Tax code; Economic projections

Type: Report

Abstract:

Several tax-cut measures often termed “middle-class tax cuts” are scheduled to expire on December 31. On September 23, Congress passed legislation to extend these tax cuts. The legislation did not offset the tax cuts’ costs.

As a result of this action to extend the tax cuts, most middle-class families will have lower tax bills over the next several years than they would have if the tax cuts were allowed to expire. Yet it is far from clear that middle-class families will be better off over the longer term. To the contrary, there is reason to believe that a majority of middle-class families could end up worse off