Tax Expiration Would Hit Low-Income Workers Hard

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Washington, DC - Low-income workers will pay substantially higher taxes if tax cuts expire on schedule at the end of 2010, according to a new study from the Tax Foundation.

"When comparing changes in after-tax income, low-income workers benefitted substantially from the Bush-era tax cuts. And so they would pay much higher taxes if political gridlock allows the imminent expirations to occur on schedule," said Nick Kasprak, author of Tax Foundation Fiscal Fact, No. 250, "The Potential Impact of Expiring Tax Cuts on Low-Income Taxpayers."

The principal provisions of the Bush tax cuts that cut taxes for low-income workers are the doubling of the child tax credit, increased standard deductions and earned income credits for couples, and the creation of the 10-percent tax bracket.

Moreover, low-income taxpayers have benefitted from many temporary stimulus measures enacted in 2009 that are also set to expire at the end of this year: the making-work-pay credit, a further expansion of the earned income credit for couples, greater refundability of the child tax credit, and bigger credits for college education.

"The various tax proposals made by the parties in Washington all extend most of these low-income tax cuts," explains Kasprak, "but the current Congress has shown itself to be unusually susceptible to gridlock so the threat of automatic, full expiration of all these cuts is quite real."

Fiscal Fact No. 250 is available online at, and anyone can calculate an approximate personal tax liability in 2011 at To schedule an interview, please contact Bill Ahern at (202) 464-5101 or

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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