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Legislation & Politics | ||
Letter to Senators opposing the "Tax Relief Act of 2005"November 16, 2005 Dear Senator: On behalf of the 1.4 million members of the American Federation of State, County and Municipal Employees (AFSCME), I strongly urge you to oppose the Senate's proposed $60 billion Budget Reconciliation tax package — the "Tax Relief Act of 2005." We oppose this tax package for a number of reasons. First and foremost, although it is technically a freestanding bill, it is intrinsically intertwined with the Senate's harmful proposed Reconciliation budget cuts of $44 billion, "The Deficit Reduction Act of 2005." AFSCME opposes these budget cuts because they will inflict harm on working families. AFSCME is further troubled by the hypocrisy of claims that these budget cuts are needed to reduce federal deficits. If the Senate intends to cut the budget by $44 billion to decrease the deficit, the Senate clearly should not give away $60 billion in tax breaks and thereby increase the deficit even more. Second, the net $60 billion tax break package would divert needed funds that states and localities would otherwise use to deliver vital public services to the nation's children, seniors, and needy families. Furthermore, given the federal government's need to rebuild the Gulf Coast, pay the long-term costs of Iraqi military operations, and invest in 21st century priorities like education, job training, and domestic infrastructure, now is the wrong time to enact these costly tax breaks. Although AFSCME is pleased the Senate Finance Committee dropped the capital gains and dividends tax breaks ($10 billion) because they were so significantly skewed toward the rich, it is disturbing that these provisions are expected to be added back during the House-Senate Conference. These tax breaks would grant taxpayers with incomes above $200,000 more than 78 percent of the tax breaks and yet grant taxpayers with incomes under $75,000 less than six percent of the tax breaks. This tax bill should not be used as a vehicle to cut taxes for the wealthy. AFSCME acknowledges this tax package contains several meaningful revenue raisers, including reducing corporate tax avoidance on foreign earnings; clarifying the "economic substance" doctrine; and revaluing last-in, first-out inventorying at integrated oil companies. However, this bill should go further and close more corporate tax loopholes and suspend earlier-approved tax breaks for millionaires. While AFSCME recognizes this tax package contains $7 billion of hurricane disaster relief, $7 billion of tuition deductions, and $4 billion of savers credits, we can not support this tax package knowing these helpful tax measures will be more than offset with corresponding deeper cuts to vital public services. We urge you to vote to oppose this tax plan.
Charles M. Loveless |
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