Tax Brief for 107th Congressional Retreat

TO: Members of the 107th Congress

FROM: Paul Beckner, President, Citizens for a Sound Economy

SUBJECT: Retreat Agenda


On behalf of CSE’s 280,000 grassroots citizen-activists, I urge you to use your time during your retreats to develop a united and comprehensive strategy to pass an across-the-board tax cut, which includes:

Across-the-Board Reductions in Marginal Rates

Elimination of the Death tax

Elimination of the Marriage Penalty

Why America Needs a Tax Cut

Long Overdue: We have not had broad-based tax cuts since 1981. In the generation that has passed, America has seen:

Congress pass five major tax increases

The cost of a college education increase by nearly $30,000

The end of the Cold War, resulting in reduced spending on national security

An increase of 5.16 million dual-income working families

A generation of Working Americans should not have to wait any longer for a meaningful tax cut.

Economic Growth: Given the weak economy, an across-the-board cut in income tax rates would spur renewed economic growth, higher personal income and capital investment. Whether or not you believe that such a package will prevent the impending recession is secondary to the fact that real people are already suffering from lost jobs and lost potential. Pro-growth tax relief will help change those fundamentals, and is the best, most humane action government can take to reverse that damage to hard-working Americans.

Tax Reform: The federal tax code is a 44,000 page catalogue of favors for special interests and a chamber of horrors for the rest of America. By reducing marginal tax rates and eliminating some of the worst aspects of the code, the Bush proposal moves in the right direction of scrapping the code and providing fundamental tax reform. It is a solid down payment on fundamental reform.

Controlling Spending: If the money stays in Washington, the politicians will find ways to spend it on bigger government. The projected $5 trillion surplus belongs to the American people, not to a centralized bureaucracy.

How to Provide Real Tax Relief?

CSE supports the passage of the full $1.6 trillion package as developed by the Bush Administration.

Any tax package MUST include an across-the-board rate cut!!

The elimination of the Death Tax and Marriage penalty have already passed Congress with significant bipartisan support – and belong in any tax cut package.

The Bush tax cut plan is less than 1/2 the size of the tax cut introduced by President Kennedy and 1/3 the size of President Reagan’s tax cut. A Democrat-controlled Congress passed both of these tax cut packages.

Enact Across-the-Board Tax Relief: All working Americans deserve a tax cut. Washington shouldn’t pick winners and losers, or as Democratic Senator Zell Miller says, “play eeny, meany, miney, mo.”

Government should not take more than 1/3 of anyone’s income

Reducing marginal rates is a pro-growth boost for a slowing economy

One-in-five low income taxpaying families will no longer pay any income tax at all

Reducing marginal rates is fair, honest and simple

Eliminate the Death Tax: This tax is fundamentally unfair and a tax on basic American values. It taxes:


Family-owned businesses

Investment in capital

Sound environmental stewardship

The Death Tax is anti-job. It is the leading cause of dissolution for most small businesses. Seventy percent of businesses never make it past the first generation.

The Death Tax collects little revenue. It is responsible for only 1.5% of federal revenue but its compliance costs the economy more than the Treasury collects. Currently, 16,000 lawyers work primarily on estate planning and probate law.

The Death Tax is not compatible with a modern shareholder democracy. Technology has made it possible for more and more Americans to own stocks and bonds, and tax policy should encourage, not punish savings and investment by the American people.

Eliminate the Marriage Penalty: Federal tax policy should not punish the institution of marriage. Over 21 million couples pay higher taxes simply because they are married. And, the marriage penalty hits more and more families every year. There were 3 million more dual-income working families between 1989 and 1998.