Report: Thousands of Virginians benefit from federal tax deal
What does the tax deal approved by Congress mean for Virginia and Maryland?
Earlier this week, the Commonwealth Institute for Fiscal Analysis in Richmond released a report showing that the compromise would provide a 13-month extension of emergency unemployment benefits to 23,000 Virginians, would allow 53,312 families to receive a tax credit for child care and that 134,459 families would benefit from the improved Earned Income Tax Credit.
Institute president Michael Cassidy concluded the deal would spur economic growth in the state and would be "welcome news" for Virginia. That assessment was notable because the Commonwealth Institute tends to look at tax issues from a progressive perspective.
The analysis was released as the compromise was under debate and some Democrats were calling on their party to reject the deal because it extends Bush-era tax cuts to all Americans, including the wealthy. The institute estimated that in Virginia 22 percent of the total tax cuts contained in the compromise would go the wealthiest 1 percent of income earners--those who make more than $1.3 million a year.
At the request of the Washington Post, Cassidy also crunched numbers for Maryland and the District, finding that 8,000 families in D.C. and 61,000 in Maryland would benefit from the improved Earned Income Tax Credit. He said 8,260 families in the District and 111,000 in Maryland would benefit from the child care tax credit. And 13,900 unemployed Marylanders would receive extended benefits.
Cassidy called on the state government in Virginia to make corresponding changes to its tax code that would help working class residents. One appeared Friday in amendments proposed by Gov. Bob McDonnell (R) to the state's two-year budget, as he proposed that state tax returns reflect improvements in the federal earned income tax credit. The result would be a $6 million tax cut for 134,000 working class residents.
Rosalind S. Helderman
| December 17, 2010; 3:18 PM ET
Categories: Robert F. McDonnell, Rosalind Helderman
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