Original Post
June 6, 2011
by Kate Brock
Flashback to June 7, 2001. Newly elected President George W. Bush signed a bill cutting taxes by $1.35 trillion over ten years. This was the first of several tax cuts that Bush would sign, which would end up costing our nation a total of two and a half trillion dollars in lost revenue over a decade. Then Senator, now Governor Chafee voted against them, but his sensible opposition was not enough.
Ten years later, the promised prosperity that was supposed to emerge from these tax cuts has failed to materialize. Rhode Island’s official unemployment rate in June 2001 was 4.4 percent. Today the seasonally adjusted rate is more than double that, 10.9 percent. Nationwide, the unemployment rate was 4.7 percent. Today it is hovering around 9 percent.
At the end of last year, supporters of Bush’s policies held the extension of unemployment benefits hostage to push through an extension of the Bush tax cuts for another two years. Many of these same lawmakers say they want to extend the tax cuts again into 2013 and beyond, which would almost double the federal budget deficit.
A few people – the super wealthy – are better off because of the Bush tax cuts. According to new figures released by Citizens for Tax Justice, the wealthiest one percent of Rhode Island residents, who will have an average income of just over $1 million in 2013, would receive an average tax cut of $50,617 in that year.
In contrast, the poorest 60 percent of Rhode Islanders, with an average income of $27,754, would receive a tax cut of just $429 in 2013.
To put that number into perspective, the average American household pays $300 a month just to fill their gas tank. Fair? Hardly.
The lawmakers who want to increase the deficit again by extending the tax cuts are the same lawmakers who claim that the deficit forces them to slash public services.
Here in Rhode Island and in state legislatures across the country our leaders are pushing through budgets and tax policies based on the same flawed premise, that tax cuts for the wealthy will create jobs. Rhode Island lost over one hundred million in revenue from the flat tax since 2007. Last year’s tax overhaul effectively codified the flat tax, giving our state’s top earners a 4.1% tax break. And what have we seen as a result? Devestating cuts to socail services that support Rhode Island families.
We can prosper by building a state and a country that works for all of us – that rewards hard work with good American wages and benefits, including affordable health care. We need to create good-paying jobs and help middle-class families reclaim their security while at the same time giving low-income families the opportunity and mobility to move into the middle class, and none of that investment can happen without ending tax breaks for the wealthy.
Congress should commemorate the tenth anniversary of the Bush era tax cuts for the rich by ending them and use the money to invest in American families. Members of the General Assembly should rectify last year’s error and pass a 1% personal income tax increase on our state’s top earners. Click here to ask your Rep and Senator to stand up for working families. But we can and must do more. Congress should invest in a budget that creates jobs. It can raise the money for that by passing Rep. Jan Schakowsky’s Fairness in Taxation Act, which taxes millionaires and billionaires. Plus it can close corporate loopholes that allow corporations to profit when they ship jobs and profits overseas.
While we can’t go back in time and change June 7, 2001, we can learn from our mistakes and create a more prosperous tomorrow. We can invest in our most valuable resource, our people and reclaim hope and opportunity for our state and for our nation.
Kate Brock, Executive Director, Ocean State Action