The debate over tax breaks for the wealthy has been an ongoing and controversial issue, with the state of Iowa being no exception. The proposition to extend tax breaks for individuals inheriting multimillion-dollar estates in Iowa has sparked a debate, with experts criticizing the proposal as a bad idea, particularly when combined with other proposals that would end tax improvements used by over 86,000 families just to get by.
The Center on Budget and Policy Priorities (CBPP) released a report estimating that pending proposals to continue estate-tax breaks enacted in 2010 would only benefit the wealthiest 0.3 percent of estates or about 7,000 nationwide. At the same time, the proposals would let vital tax-credit improvements expire for 25 million working families, including improvements in the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and the American Opportunity Tax Credit (AOTC). The CBPP estimates that the loss of those improvements would force over 1 million people, including 900,000 children, into poverty.
The estate-tax break would only affect one-tenth of 1 percent of all estates in Iowa, or 40 estates, in 2013. However, the loss of working-family tax-credit improvements on Dec. 31 would harm 86,321 families with 190,553 children. Charles Bruner, the executive director of the Child & Family Policy Center and co-director of the Iowa Fiscal Partnership, has stated that Iowans need to understand the stakes for families in the fiscal choices being considered in Washington. This new analysis of two options shows this as clearly as any measure they’ve seen.
According to Osterberg, the estate-tax breaks are costly and projected to expand budget deficits by $141 billion over 10 years. These tax breaks would come on top of nine years of significant reductions that quadrupled the amount that heirs can receive tax-free.
In conclusion, it is clear that extending tax breaks for multimillion-dollar estates is a bad idea. The proposal to end tax improvements for working families in order to do so would cause significant harm to those who need it most. It is essential that policymakers consider the long-term impact of their decisions, and that the interests of all Americans, not just the wealthy few, are taken into account.
Overall, the issue of tax breaks for wealthy individuals is a highly contentious and polarizing issue, with strong arguments on both sides. However, it is crucial to consider the impact of these proposals on working families and ensure that the interests of all Americans are taken into account. It is important that policymakers weigh the benefits and drawbacks of these proposals and make informed decisions that prioritize the needs of the majority, rather than a select few.