Most tax savings go to the richest Americans

‘Richest Americans get most tax savings’

Thu, 30 May 2013 13:44:01 GMT

The richest 20 percent of US households will receive more than half of the benefits in the overall savings in tax breaks this year, a report shows.

More than half of the USD 900 billion tax benefits projected for 2013 will be allocated to households with income in the top 20 percent of the population, the Congressional Budget Office (CBO) reported on Wednesday.

The government agency added that 17 percent or USD 153 billion in tax relief will be distributed to households in the top 1 percent of the population – those with at least USD 327,000 in annual income.

The middle 20 percent of the population will receive 13 percent of those tax expenditures, while the lowest 20 percent will get only 8 percent, said the CBO.

This is while a new study by Audit Analytics found that large US companies have boosted their overseas earnings by 15 percent last year to a record USD 1.9 trillion, while keeping their profits abroad to avoid paying taxes under the tax deferral law.

Moreover, an average American taxpayer would have to pay an extra USD 1,026 in taxes to make up for the lost revenue of offshore tax havens by corporations and wealthy individuals.

US President Barack Obama and democratic lawmakers have pushed for tax reforms including limits on tax breaks for the rich, as an alternative to sweeping cuts following the sequester.

“We think it’s important to decide whether we want to prioritize education for the kids of our servicemen and women or tax expenditures for the top 1 percent,” said Representative Chris Van Hollen, member of the House Budget Committee.

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