Some Tax Cuts Are Wiser Than Others
Would Stimulus Bill Squander Funds Needed for Crisis?
Below is a news announcement from United for a Fair Economy.
As layoffs mount, the anthrax crisis deepens, and vulnerability to smallpox terrorism becomes clearer, Congress is set to give budget-busting handouts to -- ready for this? -- the wealthiest individuals and corporations. The $100 billion stimulus bill, H.R. 3090, narrowly passed by the House of Representatives, would not only be ineffective for economic recovery, it would be a dangerous misuse of funds urgently needed for crisis response.
** One hundred million antibiotic treatments for anthrax infection and better baggage screening machines at every U.S. airport would cost less than the bill's $12.8 billion speed-up of income tax rate reductions for the best-off 30% of taxpayers.Response to the bill from members of UFE's Responsible Wealth (RW) project, who are in the top 5% of wealth or income, has been overwhelmingly negative.
** Quadrupling the Centers for Disease Control budget, extending unemployment benefits for three million people for 13 weeks, federalizing airport security with no ticket price increases, and modernizing Amtrak would cost less than the bill's $40.2 billion tax cut for accelerated depreciation.
** Fourteen profitable corporations such as IBM and General Motors would get $6.3 billion in rebates of their Alternative Minimum Tax (AMT) payments back to 1986. These companies together had in 2000 a net worth of over $217 billion and $43 billion in cash in the bank. Total AMT rebates would cost $25 billion, more than the total value of the rebates the bill gives to the 39% of American households who didn't get a full rebate this summer.
"Iıd be embarrassed to take a tax cut at a time like this," says New York RW member Richard Perl, President of Pacific Partners International Investments, Inc. "With so many in my city grieving, digging through rubble, and losing their jobs, my government should be asking me to pitch in, not handing me a bonus. The priorities of this stimulus package are upside-down. It is not just ineffective, itıs unpatriotic."
RW member Dal LaMagna, CEO of Tweezerman Corporation in Glen Cove, NY, adds, "Weıve had nine interest rate cuts this year and still nobody's investing. Why should manufacturers like my company react any differently to tax incentives? What drives businesses to expand is demand for our products, so what we need is a tax and spending package that puts money into the hands of people most likely to spend it."
United for a Fair Economy is a national organization based in Boston that spotlights growing economic inequality. For more information, contact Betsy Leondar-Wright, (617) 423-2148 x13
Taxes are bad, so cutting taxes is good. However, giving billions of dollars in rebates to healthy corporations from their taxes paid in the 1980s, does not sound like a very high-priority "stimulus" for the future. Isn't there a better way? What would your proposal look like? Tell your views to The Progress Report:
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