2004

Do big federal tax cuts for the few
      make $ense for the majority

of us?

·       Homeland Security assistance to local police, fire & other front-line staff is under-funded by $98 billion for the next 5 years ($98 billion is 4 times what Washington now spends). [1]

·       One out of every three people under 65 had no health insurance for part or all of 2002-2003. [2]
 

·       Tax cuts & other federal policy changes cost the  average state 8.4% of its “general fund” budget. [3]

·       2 million long-term unemployed have gone without extended unemployment benefits. [4]

·       Unless “taxes are raised again, the answer will have to be severe program cuts” in Social Security, Medicare and Medicaid. [5]

Get involved. A little of your time will help a lot.

www.nhcitizensalliance.org/UpcomingCanvasses.html;
www.act4victory.org; www.n2nma.org; 202-974-8330;
www.MoveOn.org/keepmeposted/volunteer.html.

·       TAXES/STATE AND LOCAL BUDGETS

o      In New England, federal tax cuts, “unfunded

    mandates”, and tax code changes will cost

    Massachusetts $1.1 billion in 2005, Connecticut - $782

    million, Maine - $222 million, New Hampshire -

    $145 million and Vermont - $126 million. [6]

    (See the data source for your state.)

o       “’Many cities with budget shortfalls are cutting
    their police forces and closing innovative law
    enforcement units’. - - Cleveland has laid off 15
    percent of its cops – 250 officers.  Pittsburgh has lost a
    quarter of its officers, and Saginaw, Mich., a third. 
    The Los Angeles County Sheriff’s Department has
    waved goodbye to 1,200 deputies - - ‘This is all
    compounded by the fact that there is just less
    money coming in from Washington’ ”. [7]

·       HEALTH CARE

o       We could lower health insurance premiums by 10% and extend coverage to 27 million uninsured people for less than the cost of making the White House tax cuts permanent (i.e. extending the tax cuts beyond 2010). [8]  (To do this, Senator Kerry’s plan would pay three-fourths the cost of “catastrophic care” and expand the State Children’s Health Insurance and Medicaid programs to cover many more working families.  This plan would cost between $653 billion and $950 billion over 10 years, paid for by rolling back tax cuts for people over $200,000.) [9]

o       It would cost more than $2 trillion over 10 years to make President Bush’s 2001 and 2003 tax cuts (and related cuts) permanent. [10]

o       The President’s health plan would cover another 1.8 million people versus 27 million under the Senator’s plan, according to independent estimates. [11]

·       EDUCATION

o       “39 percent of student borrowers have unmanageable debt after they graduate [college]” (due to student loan payments over 8% of income). [12]

o       Funding for “No Child Left Behind” has totaled $32 billion (about 25%) below the levels authorized by Congress during the 4 year state fiscal crisis. [13]  

o       Senator Kerry’s plan would increase the maximum higher education tax credit to $2500, from $1500, and make it refundable (people in lower tax brackets might get a refund).  This tax credit would apply to every year of school, rather than just the first two allowed under the current system. [14]

o       The Senator would increase education funds by $20 billion/year for uses such as full funding of “No Child Left Behind” and special needs ed’n. [15]

The bottom line:  “’The American dream of

   building something better’ has been replaced by

   the reality of ‘just getting by’.  It has become

   increasingly difficult to get into – or stay in – the

   middle class.” [16] 
  

·        By 2009, the White House budget plans a 10.4% cut in the total pot of money available for health, education, the environment, job training, roads, housing and many other services (adjusted for inflation). This cut affects everything except defense, debt service, homeland security & elderly entitlements like Social Security (which may suffer cuts not yet planned).

    Examples of Bush Administration cuts to be phased 

    in by 2009: [17]

o       Natural Resources & Environment - 20 % ($6.8 billion).

o   Veterans’ medical & other services - 17% ($5.7 billion).

o       Section 8 housing vouchers - 600,000 fewer families (30% cut).

o       Energy programs - 27% ($1.2 billion).

o   Nutrition for Women & Children (WIC) – 450,000 fewer participants.

o       Head Start – 6.8% ($650 million).

·        These service cuts are caused primarily by tax cuts, not over-spending; “the large deficits - - for the coming decade are more a reflection of a historically low level of revenues, measured as a share of the economy, than of an unusually high level of federal spending.  In 2004, revenues will total 15.8% of [the economy] - - the lowest level since 1950.” [18]

·        You may have trouble believing the previous

    paragraph because most of us now pay a higher

    share of the tax burden.  Why? Corporate tax

    revenues today average only 10% of total federal

    tax revenues, compared with 28 percent in the

    1950’s and 21 percent in the 1960’s. [19]  Wealthy 

    people also pay less; “the effective federal tax rate

    on the best-off 1 percent of Americans has dropped

    by 30 percent over the past quarter-century”. [20]  
   

    Contrary to the myth, we do have the resources we

    need for a decent future.  We must stop cheating our

    children. [21] If “the wealthy paid the same share of

    their income in taxes today as they did in 1977,

    annual revenues would jump by $200 billion. 

    Likewise if corporate income taxes were restored to

    the share of the economy that they averaged from

    1950 to 2000, companies would pay $180 billion a

     year more.” [22]

    Further, “tax avoidance among corporations & upper-

    income individuals is far outrunning the audit

    capacity of the IRS. There’s a $113 billion gap

    between what corporations should [and actually

    do pay].” [23]