The Issues
America needs a tax system that promotes a more fair and just society and raises the revenues needed to invest in increasing economic security and opportunity for all Americans. After years of tax cuts for the rich and powerful, tax policies must ensure that individuals and corporations contribute their fair share, based on ability to pay.
The Federal Budget: An Insider's Guide to National Priorities
The federal budget is a window into the priorities of the President and Congress. The President's budget calls for more unfair tax cuts and decreased funding for programs vital to families — but the congressional budget this year sets different priorities.
Congress is moving forward on bills to fund services for families and communities at a responsible level, expand health care coverage for uninsured children, and improve Food Stamp benefits for low-income Americans — but President Bush has threatened to veto all of them.
The Bush Tax and Budget Legacy
Since 2001, tax cuts have been the centerpiece of the Bush domestic agenda, whatever else was happening at home or abroad. Overall, the Bush tax cuts have reduced tax fairness, increased inequality, burdened the nation with debt, undermined critical services, and failed to grow an economy that works for all Americans.
Closing the Tax Gap and Tax Loopholes
Every year, hundreds of billions of dollars that should be paid in taxes by corporations, business owners, and wealthy investors is uncollected, putting an unfair burden on hardworking Americans who pay all their taxes. Closing tax loopholes and requiring tax cheats to pay what they owe would increase tax fairness and raise needed revenues.
Taxing Private Equity and Hedge Fund Managers Fairly
Managers of private equity and hedge funds — some of the richest people on the planet — pay lower tax rates than ordinary working Americans. Congress is considering legislation to close this tax loophole.
This tax is supposed to ensure that high-income households pay a minimum amount of income tax. But, unless it is changed, the AMT will affect millions of additional taxpayers next year. Reforms could prevent the AMT from impacting the middle class, while protecting revenues by ensuring that the very wealthy pay their fair share.
Tax Credits for Working Families
The Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Credit provide valuable tax benefits for many working families, but some of the poorest families and workers get little or no help. Improvements to these credits could significantly reduce poverty.
Income from investments — capital gains and dividends — is currently taxed at much lower tax rates than income from work. Because most investments are owned by the very wealthy, the benefits of the special low tax rate on capital gains and dividends overwhelmingly go to the very richest Americans.
The federal estate tax is paid only by the estates of the most affluent individuals, but raises a significant amount of revenue to fund vital services. Yet President Bush, some congressional leaders, and a handful of super-wealthy families are seeking to repeal or drastically reduce this highly progressive tax.