Extending federal tax breaks for 40 Iowa families inheriting multimillion-dollar estates is a bad idea, especially when combined with other proposals that would end tax benefits used by more than 86,000 families just to get by, says the leader of an Iowa public policy group.
The Iowa Policy Project on Monday said a proposed extension of the estate tax break would affect just one-tenth of 1 percent of all estates in Iowa - only 40 estates - in 2013. The extension is part of proposed legislation to avert the so-called fiscal cliff in January.
At the same time, allowing tax credits such as the Earned Income Tax Credit to expire would harm more than 86,000 working families in the state, the organization estimates.
"It's not fair. It's poor fiscal policy and it's not good for the economy, either," said David Osterberg, executive director of the Iowa Policy Project and co-director of the Iowa Fiscal Partnership, in a release."This is one more example of how poor and middle-income families are expected to pay for totally unnecessary and unaffordable tax breaks for the extremely wealthy in America."
The Center on Budget and Policy Priorities (CBPP) on Monday released a report that estimates pending proposals to continue estate tax breaks enacted in 2010 would benefit only the wealthiest 0.3 percent of estates, or about 7,000 nationwide.
The CBPP estimates that 25 million working families would be adversely affected if the Child Tax Credit, Earned Income Tax Credit and the American Opportunity Tax Credit are allowed to expire.