Tuesday, August 10, 2010

GOP Tax Cut Bill Would Add Almost $7 Trillion to America's National Debt To Further Enrich the Wealthiest

Citizens for Tax Justice reports:

On April 15 of this year, Rep. Jim Jordan (R-Ohio) and Rep. Jason Chaffetz (R-Utah) introduced a bill calling for a huge federal tax cut. They titled their bill (H.R.5029) “The Economic Freedom Act.” But it would better be called the “Endless Borrowing Act.” It would add almost $7 trillion to the national debt over the next ten years, mainly to further enrich the very wealthy.According to its sponsors, H.R. 5029 was introduced “in conjunction with the Republican Study Committee,” whose membership includes two-thirds of all House Republicans.

The bill has also been endorsed by a number of anti-tax organizations and people whose relentless pursuit of debtfinanced tax cuts for corporations and the wealthy has played a central role in the growth of the national debt over the past three decades. These include the Heritage Foundation, the anti-union National Taxpayers Union, the American Conservative Union, and the National Federation of Independent Business (which represents the nation’s “largest” small businesses) — plus, of course, GOP political strategist Grover Norquist. H.R. 5029 proposes to do the following:

• Cut the payroll taxes that pay for Social Security and Medicare
in half. (This particular tax cut is for one year only).

• Completely eliminate taxes on capital gains, for both individuals
and corporations.

• Eliminate almost three-quarters of the corporate income tax by (a) allowing businesses to write off equipment purchases immediately, rather than gradually as the equipment wears out & reducing the regular corporate tax rate to 12.5 percent (from the current 35 percent).

• Repeal the estate tax, a tax that falls almost entirely on the nation’s wealthiest families. Citizens for Tax Justice has analyzed the effects that H.R. 5029 would have on federal deficits and debt, as well as the distributional effects of the bill. These are our key findings:

The bill would add a staggering $6.9 trillion to federal deficits and debt over the upcoming decade. That’s $6,884,000,000,000 in additional government borrowing
over the next ten years, equal to almost $23,000 in added debt for every man, woman and child in our country. Starting in 2012, more than three-quarters of the proposed
tax cuts would go to the best-off five percent of all taxpayers, with 62 percent going to the top one percent).

In 2012, the average tax cut for the bottom 80 percent of all taxpayers would be $399. In contrast, the average tax cut in 2012 for the best-off one percent would be $157,522.

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