No Tax Increases in a Tax Cut Bill!

May 20, 2003

House-Senate Tax Conference

The Capitol

Washington, D.C. 20515

Dear House-Senate Tax Conferees:

We strongly support sound tax relief, and would like to express our thanks for the tremendous progress to date in both the House and the Senate. Because of your hard work, America is now very close to real tax relief that will create jobs and growth to get the economy moving again.

We applaud the accelerated across-the-board income tax rate reductions passed by both chambers. Reducing marginal tax rates for all taxpayers will spark additional work, investment, and productivity.

We strongly favor the ongoing effort to eliminate double taxation on savings and investment. Specifically, we would like to see the Conference Report adopt full repeal of the dividend tax, in addition to reducing the capital gains tax as much as possible.

Further, all tax relief included in the final bill should also make the tax code more simple and fair.

In addition to supporting meaningful tax cuts, we are also writing to express our serious concerns regarding the nearly $90 billion in tax increases in the Senate-passed bill. Placing tax increases in a tax relief plan undermines its effectiveness and significantly weakens political support for final passage.

We strongly urge the Conference to remove all of these misguided “revenue offset” provisions as soon as possible. These “offsets” are tax increases under another name. Efforts to eliminate objectionable tax code provisions should be done in the context of fundamental tax reform. We urge Congress to take up the effort to scrap our current tax code as soon as it has delivered tax relief to the American people.

We also oppose the inclusion of $20 billion to bailout profligate state governments. This flawed idea will reward mismanagement and would reduce the accountability of state governments. Instead, these funds should be used for additional tax relief.

The House and the Senate are poised to deliver historic tax relief to the American people. We will continue to work hard to ensure the success of tax cuts that will change incentives and spur economic growth and jobs creation.

Respectfully,

Citizens for a Sound Economy

cc: The U.S. House of Representatives

The U.S. Senate

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