Stop Trillions in Tax Breaks for Millionaires and Big Corporations

Republicans in Washington, DC are pushing to give $4.2 trillion in tax breaks to millionaires and big corporations, and pay for this by slashing bedrock programs like Pell Grants and Medicare.  The Republican plan is a package of radical proposals directly off the hard-right wish list that—like Robin Hood in reverse—would shift resources from struggling middle class and low-income families to the wealthiest people and biggest corporations in the country.  Here’s some background information on this critical Fair Share campaign:

The centerpiece of the Republican plan is $4.2 trillion in tax giveaways that will mostly benefit the rich.  The proposal:
•    Makes the Bush tax cuts permanent.[1]   This alone is worth $40 billion each year to American millionaires,[2]  and gives the average millionaire a $125,000 tax cut.[3]
•    Reduces the top income tax bracket from 35% to 25%, giving the average millionaire a NEW $200,000 tax cut each year.[4]
•    Extends estate tax giveaways to the wealthiest ¼ of 1% (or 0.0025) of Americans, costing tens of billions of dollars each year.[5]
•    Reduces the corporate tax rate from 35% to 25%.[6]
•    Protects $40 billion in subsidies for Big Oil.[7]

The rich don’t need these handouts.  

Between 1979 and 2005, the top 0.1% of earners increased their pre-tax income by $6 million, while the bottom fifth has seen their incomes rise by just $200.[8]   In fact, America’s 400 wealthiest families quadrupled their incomes over the past 12 years—but their effective tax rate was nearly cut in half. [9]

Corporations don’t need a break either.  Despite our sluggish economy, corporate profits grew 36.8% in 2010, the biggest gain since 1950.[10]   But, corporate taxes are near-historic lows as a percentage of GDP. [11]  And, some of the biggest corporations in American—like GE—didn’t pay any taxes at all in 2010 while making huge profits. [12]

Republicans pay for their $4.2 trillion in tax cuts by making $4.5 trillion in drastic, radical cuts to core programs that kids, students, seniors, working families, and the disabled depend upon.

The Republican budget would:

Slash Education Funding
•    Slash the full Pell Grant by 60%.[13]
•    Slash education funding by $17.7 billion for FY12 and $250 billion over 10 years.[14]   This is a 25% cut in education funding.[15]

Privatize and Destroy Medicare
Medicare is one of the most popular and effective social programs in American history.  The program provides health insurance for 38 million seniors (65 and older) as well as 7 million younger people with permanent disabilities. [16]  The Republican plan would replace this guaranteed coverage with a private voucher system.  Seniors would get vouchers they can use to purchase coverage from private insurance companies.  

Gut Medicaid
Medicaid covers acute care and long-term care services for low-income families with dependent children, the elderly, and people with disabilities.  The Republican proposal slashes Medicaid by 22% ($771 billion) over the next decade and turns it into a block grant program.[17]

The Republican budget also:
•    Repeals the new law that reins in Wall Street banks. [18]
•    Slashes clean energy investments by 90%. [19]
•    Slashes spending on child nutrition by 20%. [20]
•    Allows states to cut food stamps when the needs are greatest. [21]

To make matters worse, the trillions of dollars in radical cuts in the Republican plan will kill more than 2 million jobs over two years. [22]   This at a time when unemployment still hovers around 9%, our economy is struggling to recover, and creating good jobs is Americans’ number one priority.

The immediate solution is to stop all tax giveaways to millionaires and big corporations.  This means stopping the House Republican budget in its tracks and making sure that this proposal does not become the basis for a compromise down the road.

In the longer term, we must make the wealthiest Americans and biggest, most profitable corporations step up and pay their fair share of taxes. 

We can do this by:
•    Repealing the Bush tax cuts for millionaires—raises $40 billion per year. [23]
•    Closing corporate tax loopholes such as overseas tax shelters—raises $100 billion per year. [24]
•    Create new tax brackets for millionaires and billionaires—raises $78 billion per year. [25]

Fair Share is working to make sure millionaires and corporations pay their fair share, and protect crtical programs for America's kids and seniors.  We’re on the ground in California, Colorado, Illinois, and Maryland, and we're organizing online across the country.

Click here to oppose a new tax break for millionaires.

FOOTNOTES:
1.  http://www.washingtonpost.com/blogs/ezra-klein/post/paul-ryans-budget-in...
2.   http://www.tnr.com/blog/jonathan-cohn/79409/extending-bush-tax-cut-milli...
3.   http://www.cbpp.org/cms/index.cfm?fa=view&id=3452
4.   http://www.msnbc.msn.com/id/42498976/ns/meet_the_press-transcripts/
5.   http://www.cbpp.org/cms/index.cfm?fa=view&id=3452
6.   http://www.washingtonpost.com/blogs/ezra-klein/post/paul-ryans-budget-in...
7.   http://www.americanprogress.org/issues/2011/04/energy_budget.html
8.   EPI analysis of CBO data; on file with author.
9.   http://thinkprogress.org/2011/04/18/tax-disparity-chart/
10.   http://articles.latimes.com/2011/apr/01/business/la-fi-profits-20110401
11.   http://www.offthechartsblog.org/what-should-corporate-tax-reform-look-like/
12.   http://www.nytimes.com/2011/03/25/business/economy/25tax.html
13.   Id.
14.   Committee on Education Funding letter opposing H.Con.Res.34 (on file with author).
15.   Id.
16.   http://www.kff.org/medicare/h08_7821.cfm
17.   http://www.offthechartsblog.org/medicaid-funding-formula-under-ryan-plan...
18.   http://www.washingtonpost.com/blogs/ezra-klein/post/paul-ryans-budget-in...
19.   http://www.americanprogress.org/issues/2011/04/energy_budget.html
20.   http://www.everychildmatters.org/news/457-federal-childrens-watch--the-u...
21.   http://politicalcorrection.org/mobile/factcheck/201104070004
22.  http://www.epi.org/page/-/EPI_PolicyMemorandum_181.pdf
23.   http://www.tnr.com/blog/jonathan-cohn/79409/extending-bush-tax-cut-milli...
24.   http://levin.senate.gov/newsroom/supporting/2008/071708PSIReport.pdf
25.  http://schakowsky.house.gov/index.php?option=com_content&view=article&id...