We Can No Longer Afford This Wave of Tax Cuts

Given the decade of budget deficits facing the federal government, the fiscal crises being experienced by most of the states, and the need for resources to accomplish the priorities that many Americans identify as much more important than tax cuts, the following organizations came together to urge Congress to act during the coming year to stop the next phase-in of the tax cuts (which will occur in 2004). We urge people to begin a debate about what our national priorities are and whether we can afford more tax cuts, which will primarily only benefit wealthier Americans, as we face the challenges ahead.

Continuing slow growth in the economy, record stock market losses, proliferating corporate scandals, government policies that cater to the rich and make the middle class pay the bill, and a rising federal budget deficit all point to the need for a reinvigorated debate about whether the nation is on the right economic path, and particularly whether the nation can afford any more of the massive tax cuts for the rich that are scheduled for the years ahead, not to mention the additional breaks for the rich still being pushed through Congress.

We don't need new tax cuts, we don't need to make the Bush tax cut permanent, and we don't need to continue to phase in the extra tax cuts already scheduled for the rich in 2004 and beyond. We also don't need to eliminate the estate tax. Those with estates of $1 million are already exempt. Further changes would benefit only the extremely wealthy, leaving the rest of us to pick up the tab. Instead, now is the time to hold off on further implementation of tax cuts for the wealthy and ask everyone to help meet America's needs.

What we do need is a strong economy, a responsible federal budget, and a return to strong business ethics. We also need to enact a real prescription drug benefit for seniors, to protect Social Security, to invest in children and families, to improve education and the environment, to pay our real homeland security costs, and to address a host of other pressing unmet needs. We can't afford wave after wave of tax cuts for the rich.

At a time when deficits over the next 10 years in the non-Social Security part of the government are projected at nearly $1 trillion:

• Just that part of the tax cut scheduled to occur in 2004 contributes $400 billion over 7 years to that deficit, and 88 percent of it goes to the richest one percent of Americans.
   
• President Bush and some members of Congress also want to eliminate forever the estate tax on multi-millionaires, costing $850 billion over the next 20 years. This would be worth $59 million to Ken Lay, former CEO of Enron, and $55 million to Jeffrey Skilling of Enron.
   
• Leaders in the House of Representatives have proposed to "stimulate" the economy by giving a retroactive tax break to some of America's least needy or most corrupt corporations, including $254 million for Enron, $572 million for Chevron Texaco, and $1.4 billion for IBM.

The 95 percent of Americans with incomes below $200,000, meanwhile, will have to shoulder more and more of the tax and economic load if President Bush and House leaders get their way and the rich pay less and less.

Asking Congress to stop any more tax cuts now, and to act next year to freeze further phases of the Bush tax that overwhelmingly benefit the rich, will save hundreds of billions of dollars that otherwise will be drained from the Social Security trust fund and other national needs. The vast majority of taxpayers have already received most of their tax cut benefits from the 2001 legislation. The next steps will overwhelmingly go to the very wealthy. But we all should support efforts to maintain fiscal responsibility, preserve Social Security's soundness, help seniors buy prescription drugs, invest in children and families, improve education and build public safety and homeland security.