Tax Policy Should Not Cater to the Wealthy

This June 7 editorial in the New York Times - The Bush Economy - is extremely pertinent to some of the tax reform legislation being considered by Congress right now. The article points out that if all of Bush's tax cuts are made permanent, in ten years people making between $100,000 and $200,000 will pay five to nine percentage points more of their income in federal taxes than those making over $1 million per year. Those making less than $80,000 per year will see their share of taxes rise slightly or stay the same. As the article says, at this level the tax cuts are about "giving more money to those who have nothing to do with it except amass enormous estates for their heirs." And some of the current legislation being considered by Congress is unfortunately not helping us move in the other direction. Many Senators, from both sides of the aisle, are currently focusing a good deal of time to discussions on reforming both the estate tax and the alternative minimum tax (AMT). Repeal of the estate tax, which passed the House but most likely doesn't have the 60 votes needed in the Senate, would cost close to a trillion dollars in lost revenue over ten years. (Irresponsible reform could be almost as damaging.) Repeal of the AMT - rather than reform to make the tax more fair - would add nearly $1.2 trillion to deficits and the federal debt over the next ten years, assuming the tax cuts are made permanent. Lawmakers seem to be jumping at the chance to "fix" fairness issues in our tax system by looking to repeal the estate tax and the AMT. However, these reforms would only further protect the super-wealthy in our society from paying their fair share of taxes, and would leave more of the tax burden on everybody else. Congress should be looking for ways, instead, to raise revenues and constrain spending in order to bring down these unsustainable deficits; which, in the long term, will not only worsen our fiscal situation, but will worsen it disproportionately for the bottom 90 percent of taxpaying Americans.

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National Governors Association Disses Medicaid Commission

Last week, the National Governors Association (NGA) has dealt the controversial President's Medicaid Commission another blow and declined to participate. The NGA declined, citing the need to continue their work as "an independent, bipartisan group." The nation's governors have been some of the most vocal critics of President Bush's push to cut the low-income health care program that is administred by the states. Also last week, key House and Senate Democrats refused to participate in the commission and blasted it for falling far short of the independent, unbiased advisory panel proposed in a compromise in the budget resolution by Senator Gordon Smith (R-OR). Secretary of Health and Human Services Michael Leavitt will appoint nearly 80 percent of the 38 member panel and will choose all 15 of its voting members. The NGA did release a set of principles for reforming the Medicaid program. The principles focus on initiatives that would help take financial pressure off state budgets, including improving how states pay for prescription drugs, instituting long-term care reforms, and allowing states more flexibility to require Medicaid beneficiaries to pay higher cost sharing for their health care. NGA Press Release NGA Statement of Principles on Medicaid Reform

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Senate Finance Committee June 8 Hearing: Report on Reform

The Senate Finance Committee is holding a hearing today to review a report by staff on proposals for reform of land conservation easements. See the witnesses' testimony and the Committee Report on the Nature Conservancy

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Senators Discuss Estate Tax Options

Senator Jon Kyl (R-AZ) -- the Senate's point man on estate tax repeal -- told reporters yesterday the estate tax issue will come up on the Senate floor by the end of July, and "maybe... sooner than that." While Senate Republicans do not have the 60 Senate votes necessary to repeal the estate tax, they may have enough votes to pass reform legislation that could be just as harmful. One example of a reform being discussed is increasing the estate tax exemption level significantly, and lowering the tax rate to 15 percent. A reform such as this would cut revenue from the tax significantly, adding to the national deficit. Notably, Kyl mentioned if he is unable to broker a deal with Democrats, it is possible that estate tax legislation could be added as an amendment to another measure. One Senate aide noted that the energy bill could possibly be used as a vehicle to move estate tax legislation.

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White House "edits" science report, yet again

Reporters must have a Mad Libs form somewhere -- "White House edits a scientific report on ______________ to ___________ the risks of _____________." It certainly happens a lot. Here's the latest, from the NY Times: A White House official who once led the oil industry's fight against limits on greenhouse gases has repeatedly edited government climate reports in ways that play down links between such emissions and global warming, according to internal documents.

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NAS suppresses science paper at admin's request

The Associated Press is reporting that the National Academy of Sciences has suppressed a scientific assessment of the dairy industry's vulnerability to bioterror, after the administration requested the paper be delayed. The authors have argued elsewhere that these vulnerabilities demand government action to make us safer. It is only the latest example of the many ways that the homeland remains unsecured long after 9/11, because the Bush administration refuses to regulate the industries whose campaign funding propelled it into office.

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CBO Monthly Budget Review

CBO put out their Monthly Budget Review today. This one reports that in the first 8 months of FY 2005, the government incurred a deficit of $273 billion, which is $73 billion less than the recorded shortfall in the first 8 months of FY 2004. This is partially because revenues are up 15 percent, while outlays are only up 7 percent. They have risen $183 billion and $110 billion, respectively. Corporate income tax receipts are up 48 percent compared with the first 8 months of last year, and this increase primarily reflects a growth in corporate profits in the 2004 calendar year. Notably, spending on Medicare is also up significantly - more than 10 percent - as is spending on farm income-support, nutrition, and education programs, and disaster relief activities administered by the Department of Homeland Security. While the administration's tax and budget policies may appear to be cutting deficits in half, as the President promised, in reality they will end up costing much more in future years. For more info on that, click here.

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Nonprofit Panel Plans June 24 Call-In Presentation

On Friday, June 24 from 3:00 to 4:00 pm EST. the Panel on the Nonprofit Sector will host a call in presentation to review a report it plans on sending to the Senate Finance Committee earlier that week. Panel leaders will present the recommendations, take questions and explain next steps. The call is open to staff, board members and volunteers of nonprofits, foundations and corporate philanthropy programs. The Panel, convened be Independent Sector, is making recommendations to Congress on nonprofit accountability issues.

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OMB Watch Asks the FEC Protect Internet Voter Engagement

See a summary of OMB Watch's comments to the Federal Election Commission on their proposal to regulate Internet communications.

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The Rich Are Getting Richer

Click here for a great article in yesterday's New York Times about the growing gap in wealth between the richest and the poorest in our society. The very richest are getting richer, while everybody else is left to split the rest of the pie. In the meantime, the Alternative Minimum Tax (which does not affect the super-wealthy as much because it doesn't tax dividends and investment gains) is affecting a greater percentage of the "middle chunk" of the population more every year. The result is that the wealthiest in our society pay far less of a percentage of their income in taxes than the middle - and even moderately wealthy people - do. This article includes some very interesting charts and statistics on wealth trends in this country, and is worth a read.

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