How the States Would Be Affected by Extension of the Bush Tax Cuts and Other Provisions
August 28, 2012
The House of Representatives recently voted on a Republican proposal to extend through 2013 the Bush tax cuts of 2001 and 2003 and the Alternative Minimum Tax (AMT) patch. It is now with the Senate, say William McBride and Ed Gerrish of the Tax Foundation.
- The AMT patch would save middle- and high-income taxpayers $193 billion.
- Extending the Bush tax cuts, which are more evenly distributed, would save taxpayers $179 billion.
- Additionally, the bill would extend estate and gift tax provisions for a year, saving taxpayers $31 billion and small businesses up to $581 million.
- The total tax relief is pegged at $403 billion and will have immediate effects in 2013.
The Tax Foundation created a table calculating the tax relief for all 50 states with and without the AMT patch. Every state experienced tax relief with the tax cut extension and AMT patch. High-income states benefitted more, primarily because they pay the most taxes.
- New York, for example, saves about $51 billion, or 8.05 percent of their income. This would equate to $5,452 per tax filer.
- California would save $71 billion in taxes if all cuts were extended.
- On the other end, however, states like Missouri save about $1.7 billion in taxes, or 3.15 percent of income.
Source: William McBride and Ed Gerrish, "How the States Would Be Affected by Extension of the Bush Tax Cuts and Other Provisions," Tax Foundation, August 1, 2012.
Browse more articles on Tax and Spending Issues