There's an old joke on Capitol Hill that every tax bill, all of which seem to add more complexity to our tax system, has the official subtitle "The Accountants Full Employment Act."
In that same spirit, I proclaim that the approaching expiration of Dubya's tax cuts be henceforth known as "The Financial Bloggers Full Posting Act."
Of course, if you're tired of the continuing "what if"' blogging stream about what taxpayers might face if Congress lets the 2001 and 2003 tax laws sunset at the end of this year, you can change "posting" in my faux title to "redundancy."
But it is a potential big tax deal. And it's giving folks who enjoy crunching all kinds of number scenarios -- and those of us who like to write about the results -- lots of work.
Among the most prolific in analyzing what the impending end of the tax cuts might mean is the Tax Foundation. With the tax cut deadline bearing down, analysts at the organization recently tweaked their 2011 tax burden calculator.
Tax cut continuation effects: The Tax Foundation also has examined the the impact that the tax cuts' expiration would have on the average middle-income family's tax bill in each state and Congressional district.
So what's average? The Tax Foundation used the average of the families in the middle 20 percent of the income distribution.
"This is different from the 'average family,' which would have a much higher income level than the 'average of the middle-income families,' given the skewed distribution of income," notes the organization's analysts.
Also, the group says it "restricted the universe to those arrangements with two or more people. In other words, singles are excluded from this analysis, whereas any married couple family (with or without children), single parent family, or household with related people living together is included."
Now to the numbers: Overall, the Tax Foundation calculated that if the tax cuts were extended, the average U.S. middle-income family would enjoy a tax savings of $1,540.
Obviously, taxpayers in states with higher average incomes will net larger tax savings. Among those who would do much better than the national average in tax savings are taxpayers in:
- Alaska, with a savings of $1,959
- Massachusetts, with a savings of $1,931
- Connecticut, with a savings of $1,903
- New Jersey, with a savings of $1,860
- Utah, with a savings of $1,779
On a more micro level, the Tax Foundation figures show that the average middle-income family in three U.S. House of Representatives districts would net savings of more than three grand if Dubya's tax cuts are continued. They are:
- People living in Democrat Anna Eshoo's 14th district in California, where the continued cuts would be worth $3,194;
- Folks represented by Democrat Gerry Connolly in Virginia's 11th district, who would save $3,180; and
- Those living in New York's 14th district, represented by Democrat Carolyn Maloney, who would net tax savings of $3,066.
If you're an average middle-income American taxpayer you can check out the Tax Foundation's complete listing to see what your Congressional district's tax savings would be if the tax cuts are continued.
Find your Member of Congress: Don't know your district? The House has an online locator where you can enter your Zip Code to find your Member of Congress.
You'll then be taken to a page where you can click through to your Representative's website, where you can then let him or her know what you think about the upcoming tax cuts' expiration.
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- Tax cuts or total tax reform?
- Is it time for tax reform?