August 1, 2012
On behalf of the AFL-CIO, I am writing to urge you to oppose the Republican bill to extend tax cuts for the richest 2 percent of Americans (H.R. 8) and the Republican tax code overhaul (H.R. 6169). We urge you to vote instead for the responsible approach to offered by Ways and Means Committee Ranking Member Levin (H.R. 15), which would extend tax cuts for 98 percent of taxpayers and allow for the expiration of tax cuts for the richest 2 percent.
The Republican tax bills, H.R. 8 and H.R. 6169, would hurt our economy, hurt the middle class, increase inequality, and make it more difficult to fix our economy or address pressing needs such as job growth, infrastructure, health care, and education. Taken together, these bills represent an attempt to double down on all the economic mistakes that caused our economy to implode in 2008. America cannot afford to make the same mistakes all over again.
H.R 6169 would establish an expedited timeline, or “fast track,” for consideration of an outrageous Republican tax overhaul plan that would cut tax rates for the wealthy and corporations, increase tax incentives for exporting good jobs overseas, increase taxes on the middle class, increase economic inequality, and increase the deficit. This proposal is evidence of a mind-boggling failure of the Republican leadership to understand the economic pain that working Americans continue to experience or to learn any lessons whatsoever from the decades of economic policy mistakes that led to the Crash of 2008 and continue to cripple our economy. The Obama administration has rightly issued threats to veto both H.R. 8 and H.R. 6169.
H.R. 8 would persist in repeating the mistakes of the past by wasting $1 trillion on tax cuts for the richest 2% of Americans. It is time to admit the Bush tax cuts of 2001 and 2003 were horribly expensive and did not work. They were supposed to ignite job creation, but the 2000s were on track to be the worst decade of job growth in 50 years—even before the Great Recession. The economic expansion of 2001-2007 was the weakest since World War II in terms of job growth, GDP growth, wage growth, and business investment growth.
The Bush tax cuts were also horribly wasteful. They were supposed to pay for themselves, but instead they exploded the deficit and were a primary reason why budget surpluses under President Clinton turned to budget deficits under President Bush. If it hadn’t been for the Bush tax cuts, a lot of layoffs of firefighters and teachers and police officers over the past few years could have been avoided. Looking ahead to the next 10 years, our national debt would be stabilized if it weren’t for the Bush tax cuts.
That adds up to a lot of pain and waste and failure. Why would anybody want to keep repeating the same mistakes over and over again? The simple and undeniable answer is that the richest 2 percent of Americans, who benefit disproportionately from the Bush tax cuts, are hungry for more tax breaks. The average tax benefit for millionaires is $143,000, but $1,000 for middle class families.
President Obama and Democrats in Congress have taken the entirely reasonable position that tax cuts on income under $250,000 should be extended, while tax cuts on income over $250,000 should expire on schedule at the end of this year. Middle class families would continue to get their current tax benefit of about $1,000. The richest 2 percent of Americans would continue to get an even larger average tax benefit than middle class families—because their income below $250,000 would continue to be taxed at the lower current rate. However, the average tax cut for millionaires would be reduced from $143,000 to about $5,000.
Republicans in Congress have taken the outrageous position that they will oppose any extension of tax cuts on income under $250,000 if tax cuts for the richest 2 percent are not made permanent at the same time. In other words, their position is that if millionaires cannot get the full $143,000 in tax cuts to which they feel entitled, the middle class should get nothing. This position is impossible to explain or defend.
Not surprisingly, recent polls show the American people agree with President Obama and the Democrats. According to a Hart poll in June 2012, 74 percent favor letting tax cuts for the 2% expire. Other polls have yielded similar results.
The issue here is whether the Congress will fight for the 98 percent or the 2 percent. There seems to be a double standard at work: when it comes to throwing money at millionaires, Republicans seem to think America has unlimited resources. But when it comes to fixing our economy and putting America back to work, some of these same Republicans say America is broke and there is nothing we can do to create jobs except throw money at millionaires. Some Republicans also say that that because America is broke, we have no choice but to cut Medicare benefits, or cut Social Security benefits, or cut tuition assistance, or tax health benefits, or lay off firefighters, policemen, and school teachers.
America simply cannot afford this wastefulness, and we cannot tolerate these double standards. We have to prioritize our needs and allocate available resources towards the best and most effective way of meeting those needs. Right now, America’s top three needs are jobs, jobs, and jobs. Cutting taxes for the 2 percent does almost nothing to create jobs. If cutting taxes for the 2 percent were the solution, our economy would not have been so sickly even before the Crash of 2008.
We urge you to stand with the 98 percent to fix our economy and put America back to work, instead of throwing money at millionaires. We urge you to oppose both H.R. 8 and H.R. 6169 and instead vote in favor of H.R. 15, which would extend tax cuts for 98 percent of Americans and 97 percent of small businesses.