The extension of Bush tax cuts would reduce taxes paid by lower-income families as well as rich ones. According to an analysis by the Tax Policy Center this summer, that could add $137 to the after-tax income of someone earning $15,000, and $503 for someone earning $25,000, compared with what would occur if the Bush tax cuts expire. (See accompanying chart.)
Many of these households would also benefit from extension of provisions in President Obama's 2009 Recovery Act. By keeping the child tax credit refundable to families with income as low as $3,000, the tax deal could help 10.5 million low-income families. By retaining an expanded earned-income tax credit, the plan could help 6.5 million working parents.
