The Fiscal Cliff: What the White House Says It Means To Oklahoma - KATV - Breaking News, Weather and Razorback Sports

The Fiscal Cliff: What the White House Says It Means To Oklahoma Families

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Many families are worried about what will happen to them if we do fall off the fiscal cliff come January 1.

That could happen if President Obama and Congress don't come up with a new tax plan.

Here's a statement we received from the White House earlier today, which includes examples of what White House representatives say could happen to Oklahoma families.

The President's Plan

Under the President's plan, the 99 percent of Oklahoma families with incomes of less than $250,000 per year would continue to benefit in full from the income tax cuts expiring at the end of 2012:

  • Lower tax rates on up to $250,000 of income ($200,000 for single filers).
  • The doubling of the Child Tax Credit to $1,000 per child and extension of the credit to working Oklahoma families that previously could not benefit from it.
  • The American Opportunity Tax Credit, which provides as much as $10,000 of help over four years - the equivalent of a 30 percent discount on tuition at a typical state university - and thousands of dollars more help with college expenses than many Oklahoma families could have received from pre-existing tax credits.
  • The 10 percent tax bracket, which will provide middle-class Oklahoma couples with a tax cut of up to $890 next year.
  • Expansions to the Earned Income Tax Credit, which gives millions of working families the break they need.
  • Marriage penalty relief, which reduces or eliminates marriage penalties for nearly 38 million couples nationwide.

Under the President's plan, the income tax rates for high-income households would return to what they were under President Clinton, when the economy created nearly 23 million new jobs - including 243,300 new private sector jobs in Oklahoma - we went from deficit to surplus, and businesses and investors did very well.

Examples of Middle-Class Oklahoma Families that Will See Their Taxes Rise if the Middle-Class Tax Cuts Are Not Extended

EXAMPLE 1: TYPICAL OKLAHOMA FAMILY OF FOUR

  • A typical median-income Oklahoma family of four: a married couple with two children earning $63,100 would see a $2,200 tax increase.
  • A tax increase of $1,000 because the Child Tax Credit will fall from $1,000 to $500 per child.
  • A tax increase of $890 because of merging the 10 percent tax bracket into the 15 percent tax bracket.
  • A tax increase of $310 because of the expiration of marriage penalty relief that provides a larger standard deduction for married couples.

Total Tax Increase on this Family if Congress Fails to Act = $2,200

EXAMPLE 2: A FAMILY OF FOUR WITH A CHILD IN COLLEGE

A married couple in Oklahoma with a 15-year-old at home and a 19-year-old in her second year at the University of Oklahoma; the couple's income is $80,000.

  • A tax increase of $550 because instead of being able to claim the $2,500 American Opportunity Tax Credit to help with college expenses, they will only be able to claim the Hope Credit worth $1,950.
  • A tax increase of $500 because the Child Tax Credit will fall from $1,000 to $500 per child.
  • A tax increase of $890 because of the disappearance of the 10 percent tax bracket.
  • A tax increase of $310 because of the expiration of marriage penalty relief that provides a larger standard deduction for married couples.

Total Tax Increase on this Family if Congress Fails to Act = $2,250

EXAMPLE 3: AN UPPER MIDDLE-CLASS OKLAHOMA FAMILY

  • A couple with one child earning $130,000.
  • A tax increase of $890 because of the disappearance of the 10 percent tax bracket.
  • A tax increase of $3,150 because of a combination of the expiration of marriage penalty relief and the increase in the 25 percent tax rate to 28 percent.

Total Tax Increase on this Family if Congress Fails to Act = $4,040

EXAMPLE 4: A SINGLE MOTHER WITH TWO CHILDREN IN OKLAHOMA

  • A single mother with two children working full-time at $12 an hour (earning $24,000 a year).
  • A tax increase of $1,500 because the Child Tax Credit will fall from $1,000 to $500 per child and less of it will be available to low- and moderate-income working families.
  • A tax increase of $170 because of the disappearance of the 10 percent tax bracket.

Total Tax Increase on this Family if Congress Fails to Act = $1,670

We are working to get information from the Republican Party on this issue, and will post it here when we get it.

  

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