Washington, DC – On Tax Day 2009, Oregon’s Senator Jeff Merkley released the following statement about the current state of the federal tax system:
“Over the last few months, we’ve seen a skyrocketing unemployment rate in Oregon and major instability in the American economy. And for years before that, we saw an economy that was built around giveaways to the well-connected and extraordinarily wealthy, but that left working Americans with flat incomes and rising costs.
“Now, more than ever, we need to give working families a break. That’s why I partnered with President Obama and my colleagues in Congress to ensure that the American Recovery and Reinvestment Act included a tax cut for working families. The credit has already gone into effect and about 95 percent of American families will see smaller withholdings from their paychecks starting this month. Unlike the Bush Administration’s tax cuts for the richest Americans, the Making Work Pay credit is aimed to help American families and help move our economy in the right direction.
“The Making Work Pay credit is a good start, but our current tax system is still out of balance. The Bush Administration was happy to hand out tax breaks to the super-wealthy while pushing the tax burden onto middle class families. When ordinary Americans are losing their homes and jobs, when our economy needs major federal investments to restore our competitiveness, we should be asking the millionaires to help fund tax cuts for working families, not the other way around. It’s beyond time to restore balance and fairness to our tax system and I look forward to partnering with President Obama to put working Americans first.”
The Making Work Pay tax credit went into effect on April 1st, 2009, giving a tax cut to over 110 million American families, including 1.4 million families in Oregon who will save a combined $700 million in federal taxes. For 2009 and 2010, the Making Work Pay tax credit provides a refundable tax credit of 6.2 percent of earned income up to $400 for working individuals and $800 for married taxpayers. The credit will reach about 95 percent of American families who will see smaller withholdings from their paychecks starting this month.
In recent decades, while most Americans’ incomes have been stagnant, the most wealthy Americans have seen their income skyrocket and their tax rates fall. Between 1986 and 2006, the wealthiest 1 percent of Americans saw their incomes double. [1] Despite their increased wealth, that same cohort saw their tax burden shrink by one-third over the same period.[2]
If the Bush tax cuts for the wealthy were renewed, that top-earning 1 percent would receive nearly a third of the tax cuts’ benefits over the next ten years.[3]
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[1] Institute for Policy Studies, 4/8/2009, http://www.ips-dc.org/reports/#1207
[2] Institute for Policy Studies, 4/8/2009, http://www.ips-dc.org/reports/#1207
[3] Center on Budget and Policy Priorities, 3/5/2009, http://www.cbpp.org/cms/index.cfm?fa=view&id=2705
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