Comparison of Riley and Knight Tax Fairness Plans |
Tax Plan | Current | Riley | Knight |
Reform strategy |
| Increase income tax deductions over five years, ultimately cutting education revenue by $214 million. | Increase income tax deductions to federal levels and end deduction for federal income tax. |
Fully implemented |
| 2011 | 2007 |
Personal exemption | $1,500 per adult | $1,600 per adult in 2007 $2,000 in 2011 | $3,200 per adult in 2007* |
Dependent deduction | $300 per child | $600 per child in 2007 $2,000 in 2011 | $3,200 per child in 2007* |
Standard deduction | $4,000 maximum; less under $20,000 income | $4,000/couple in 2007 $7,000/couple in 2011 | $10,000/couple in 2007* |
Inflation adjustment |
| None | Annual increase as federal deductions grow |
Deduction for federal income tax | Yes | Yes | Not allowed |
Maximum family tax cut in 2007 |
| $55 for every family of four, rich or poor, in 2007 | $760 maximum for family of four |
Winners/losers |
| Small tax cut each year for every person | 3 of 5 pay less; 1 of 5 pay more; 1 pays same |
Vote of people required? |
| No | Yes |
Cost to education budget |
| $28 million in 2007; $214 million in 2011 | $0 (Plan is revenue-neutral.) |
Income tax threshold for family of four when fully implemented. Threshold: You start to pay tax on the next $100 after the sum of your deductions. | $4,600 | $15,100 | $22,900* |
*These numbers are in 2005 dollars. The Knight Plan will adjust these deductions for inflation. Assuming a 3 percent rate of inflation, the income tax threshold under the Knight Plan will be roughly $27,000 by 2011. Arise Citizens’ Policy Project |
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