Citizens for Tax Justice July 7, 1997 (Modestly amending July 2 analysis)

CTJ Compares Competing Tax Plans

House- & Senate-passed bills bust budget, favor wealthy

House Dems favor bottom 60%; Clinton plan tilts toward middle

Citizens for Tax Justice today released a side-by-side distributional comparison of the four tax plans now pending in Congress: the bill approved by the House on June 27; the bill approved by the Senate on June 26; the House Democratic alternative plan crafted by the Democratic members of the Ways and Means Committee; and the tax plan proposed by President Clinton on June 30.

Each of the plans ostensibly lowers government revenues by a total of $85 billion or less over the next five years ($80 billion in the case of the Senate plan and $70 billion in the case of the Clinton plan). The House and Senate plans, however, rely on a variety of subterfuges to pretend to meet this target. Fully effective, they will cost $55-72 billion a year (in today's dollars), far beyond the amount affordable under the budget deal. In contrast, the House Democratic plan, at $20 billion a year fully-effective and the Clinton plan, at $24 billion a year, stay within the budget constraints over the long term.

Despite its dramatically lower cost, the House Democratic plan actually succeeds in granting larger tax cuts to most families, with those in the bottom three-fifths of the income scale noticeably better off under the House Democratic plan than under the other proposals. The Clinton plan targets 57% of its tax cuts to the middle and fourth quintiles, but like the House and Senate plans offers nothing to the bottom 40%.

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