Tags: Richest | Virginians | Obama | Tax | Cuts

Richest Virginians Cash In Most From Obama Tax Cuts

Tuesday, 13 Apr 2010 07:23 AM

 

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Virginia's richest 1 percent of residents got on average $1,595 each from federal tax cuts in the 2009 stimulus law signed by President Barack Obama — the biggest average benefit for affluent taxpayers in all U.S. states, said a study released on Tuesday.

Texans ranked second, with an average $1,534 tax break for the top 1 percent.

Unlike Virginia, Texas has no state income tax.

All U.S. taxpayers got an average benefit of $1,158 apiece from the tax cuts that were part of the Recovery Act, according to the study by Citizens for Tax Justice, a Washington think tank that says it promotes tax fairness.

For the rich and the upper middle class, the break typically was from tax relief from the alternative minimum tax, which helped about 25 million people.

Mostly low-income working families with children gained from the modified tax credit for each child and the earned- income tax credit, which gave an average of $872 each to about 12 million people.

The study found that the best places for the wealthy to live when federal tax burdens were assessed were: Maryland, with $1,368 each as the average tax break under the 2009 tax cuts, followed by New York, $527 each on average; California, $525 apiece on average; Massachusetts, $179 each on average, and New Jersey, $167 each on average.

Connecticut's wealthiest residents got an average benefit, according to the Citizens for Tax Justice study, of just $4 each -- or not even enough to buy a Big Mac sandwich from McDonald's in some major cities.

But that sum at least topped the zero amount on average for each taxpayer in the top 1 percent of the District of Columbia's residents, the study said.

Yet the District of Columbia had the highest average annual income of $2.45 million, followed by Connecticut at $2.31 million.

When the study sized up the income of the top 1 percent of taxpayers in states with the best federal tax breaks for 2009, the wealthiest Virginians came in last in this affluent group with an average annual income of $1.25 million.

Though the federal government might be indifferent to where wealthy residents live, that is not the case for U.S. states and cities that rely heavily on their own local income taxes. They often woo wealthy individuals who, in some cases, pay most of their tax bill.

For example, in New York City, just 5,000 people whose adjusted incomes topped $4 million a year paid nearly 39 percent of the entire city's personal income tax in 2007, according to Mayor Michael Bloomberg. The state of New York gets more than 60 percent of its tax revenue from its income tax.

Since New York City and the state are home to so many of the nation's mega rich, some New York mayors and governors have often bashed the federal government's reliance on income taxes collected from their residents -- saying too little cash is sent back to New York.

© 2014 Thomson/Reuters. All rights reserved.

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