Northampton think tank: Tax cuts a huge reason behind deficit

NORTHAMPTON, Mass. (WWLP) - The 2012 federal deficit is $1.2 trillion, and a local think tank says tax loopholes are contributing to the country's debt.

A recent report from the Northampton-based National Priorities Project says federal revenue has dropped over the last 10 years. And as lawmakers on Capitol Hill debate whether to extend the Bush-era tax cuts, senior analyst Mattea Kramer says the cuts are allowing the wealthiest Americans to get a $70,000 tax break.

Kramer told 22News that their report also found major tax avoidance among big corporations.

“Corporations are supposed to pay about 35% of profits as federal income taxes, last year corporations paid taxes that were equal to about 9½% of their profits,” she said.

Kramer says corporate tax avoidance is a major piece in the federal deficit, because money is not coming into the U.S. Treasury. She added that if there were no Bush-era tax cuts, nearly a third of the federal deficit would disappear.