Kerry-Edwards Fact Sheet on Bush's Failed Plan On Taxes For The Middle Class
To: National Desk, Political Reporter
Contact: Chad Clanton or Phil Singer, 202-464-2800, both of Kerry-Edwards 2004
WASHINGTON, Sept. 2 /U.S. Newswire/ -- Following is a fact sheet from Kerry-Edwards 2004:
FAILED PLAN: George Bush is Considering a Retail Sales Tax - A Huge Tax Increase On Middle-class Families
Bush Has Refused To Rule Out A National Sales Tax After Expressing Support For It. Bush's mention of the national sales tax came amidst what seemed to be a concerted effort to float such an idea as a major second term agenda. The very day President Bush discusses this, the Bush-Campaign hosted a conference call for House Ways and Means Chair, Bill Thomas, where he said we should hold hearings on major tax reform ideas and both of these comments were made only two days after Speaker Dennis Hassert called for complete elimination of the IRS on national television. Then when he was given a chance to rule it out a national sales tax, Bush said it was an "interesting idea" that "we ought to explore seriously." When asked about the exchange on Larry King, Bush refused to rule it out, restating that it was, "an interesting idea." (Bush in Niceville, FL, 8/12/04; CNN, "Larry King," 8/15/04)
Independent Study Finds National Retail Sales Tax Would Have To Be 60 Percent To Cover All Federal Taxes. Brookings Economist William Gale writes, "To replace all federal taxes on a revenue- neutral basis over the next 10 years would require a sales tax rate of about 60 percent." To cover just income taxes, the national sales tax would have to be at least 26 percent. (William Gale, "A Note on the Required Tax Rate in a National Retail Sales Tax," 8/12/04)
Nonpartisan Joint Committee On Taxation Says A 57 Percent National Retail Sales Tax Would Be Required. Congress' non- partisan Joint Committee on Taxation analyzed H.R. 2525 - a national sales tax proposal. They found that it would require a 57 percent tax rate in order to be revenue neutral. (Joint Committee on Taxation, Memorandum, 4/7/2000)
WRONG DIRECTION: George Bush Has Shifted Burden To Middle Class, Exploded the Deficit, Without Creating Jobs
According To CBO, The Tax Burden Has Shifted To The Middle Class. "Since 2001, President Bush's tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found." (Washington Post, "Tax Burden Shifts to the Middle," 8/13/04)
From Record Surpluses to Record Deficits. America has gone from a dollar record surplus of $236 billion in 2000 to a dollar record deficit of $422 billion in 2004 - the worse fiscal deterioration in America's history. At the same time, we have seen what former Republican Commerce Secretary Peter Peterson haas called a "$10 trillion" deterioration in the ten-year budget outlook. (CBO, "Deficits and Dysfunction," New York Times, June 22, 2003.)
1.8 Million Private Sector Jobs Lost - 7 Million Jobs Short Of the President's Projection. Under George Bush, America has lost 1.8 million private sector jobs. Today, America is 7 million jobs short of the projection George Bush made in February 2002 - after 9/11, the tech bubble, and the recession. (BLS and Economic Report of the President, 2002)
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Kerry-Edwards Fact Sheet on Bush's Failed Plan For Retirement For The Middle Class
9/2/2004 1:00:00 PM
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To: National Desk, Political Reporter
Contact: Chad Clanton or Phil Singer, 202-464-2800, both of Kerry-Edwards 2004
WASHINGTON, Sept. 2 /U.S. Newswire/ -- Following is a fact sheet from Kerry-Edwards 2004:
FAILED PLAN: Bush Plan Would Increase the Deficit While Doing Nothing to Help Middle-class Families Save
Bush's New Savings Accounts Are A Tax Giveaway For The Wealthy That Would Not Help The Bottom 95 Percent Of Americans Save. The Administration billed its new "Retirement Savings Accounts" and "Lifetime Savings Accounts" as a way to expand retirement savings. But the accounts would do next to nothing for the 95 percent of Americans who currently do not earn enough to take full advantage of existing IRAs, while offering the 5 percent of families already saving the most a generous new tax windfall. (Peter Orszag, "Strengthening Retirement Security," Testimony before the Joint Economic Committee, March 10, 2004)
The New Accounts Could Cause Small Businesses To Drop Pension Coverage For Employees: The new LSA and RSA accounts would increase the amount that most small business owners could save on their own before having to provide 401(k)-type plans to their employees from $6,000 to $30,000. As Al Martin, President of the Small Business Council of America explained, "By increasing the IRA limits to create LSAs and RSAs, there would be little incentive for a small business owner to establish (a new plan)...(It) would gut the small business retirement plan system." ("Remarks to the Small Business Council of America," February 5, 2003)
Bush's New Accounts Will Create A Deficit One-Third The Size Of The Existing Social Security Deficit. While the new accounts appear to have little short-term budgetary cost, the real long- term impact of the President's savings accounts will be devastating. The accounts would blow open a new hole in our long-term deficit outlook one-third the size of the existing Social Security gap. (Peter Orszag, "Strengthening Retirement Security," Testimony before the Joint Economic Committee, March 10, 2004)
WRONG DIRECTION: While Bush Has Talked About Ownership, We Have Just Seen Record Debt
Savings Down, While Debt Is Up. There is an historic shift from saving to borrowing. Twenty years ago, families were saving about 11 percent of their income. Today, savings is -1 percent. By contrast, credit card debt was only 4 percent of family income then. Today, it is 12 percent. (Warren & Tyagi, The Two-income Trap)
Bush Proposed His So-Called Savings Plan In February 2003. "The Bush administration today unveiled its plan to create two new types of savings accounts." (New York Times, "Details Given on New Plans to Aid Savings," 2/1/2003)
Bush Could Not Get Enough Support To Include His Plan In The 2004 State Of The Union, And Included Only A Scaled Back Version In His 2005 Budget: "in his first full-dress speech of the election season -- Tuesday night's televised address to a joint session of Congress -- the president will not use the phrase (ownership society) or mention the tax breaks (for retirement savings) the conservatives have touted... the decision appears to be a substantial setback for conservatives. And it suggests that the president and his aides are settling on a cautious approach to the upcoming campaign rather than adopting a broad, new theme." (Los Angeles Times, January 16, 2004)
Republican Congressman Rob Portman, A Key Republican Leader On Retirement Savings Issues And Key Bush Administration Surrogate, Believes The Centerpiece Of His Ownership Agenda -- Administration's Lifetime Savings Accounts -- Are "A Mistake." "I think the lifetime savings accounts are a mistake," Rep. Rob Portman, R-Ohio, who serves as a liaison to the White House as the chairman of the Republican Leadership, told the National Association of State Treasurers' legislative conference here yesterday. "I have been pretty vocal as an opponent, even though I am close to the president and one of the Republicans on the Ways and Means Committee." (The Bond Buyer, March 10, 2004)
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Kerry-Edwards Fact Sheet on Bush's Failed Social Security Plan For The Middle Class
9/2/2004 12:56:00 PM
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To: National Desk, Political Reporter
Contact: Chad Clanton or Phil Singer, 202-464-2800, both of Kerry-Edwards 2004
WASHINGTON, Sept. 2 /U.S. Newswire/ -- Following is a fact sheet from Kerry-Edwards 2004:
FAILED PLAN: Bush Social Security Plan Would Increase Debt While Cutting Benefits
George Bush's Economic Report Of The President 2004 Says That His Social Security Plan Would Increase The Deficit $2 Trillion Over Ten Years. According to George Bush's Economic Report of the President 2004, "personal retirement accounts widen the deficit by design." In total, the Social Security plan presented in the Economic Report of the President (Plan No. 2 from the President's Commission to Strengthen Social Security) would increase the deficit by $2 trillion over ten years. (Council of Economic Advisers, Economic Report of the President 2004, pp. 143 and Social Security Administration, Office of the Actuary, "Estimates of Financial Effects for Three Models Developed by the President's Commission to Strengthen Social Security," January 31, 2002)
The Congressional Budget Office (CBO) Estimates That Bush's Social Security Plan Will Increase Deficits Through 2050. According to CBO, "The resulting outlays would increase budget deficits or decrease budget surpluses." According to CBO's analysis, the President's Social Security plan would result in a higher budget deficit in every year through 2050. (CBO, "Long- term Analysis of Plan 2 of the President's Commission to Strengthen Social Security," 7/21/2004, pp. 11 and Figure 2A)
The Bush individual accounts hurt the solvency of Social Security by more than 50 percent. According to independent analysis by leading Social Security scholars Peter Diamond and Peter Orszag, the individual accounts in Commission Model 2, by themselves, would reduce solvency by 1.07 percent of taxable payroll over 75 years. In other words, individual accounts add more than 50 percent to the cost of saving Social Security for 75 years. The only reason the Social Security actuaries say that this plan extends the solvency of Social Security is because of the deep cuts in guaranteed Social Security benefits and the trillions of dollars in general revenue transfers. (Peter Diamond and Peter Orszag, "An Assessment of the Proposals of the President's Commission to Strengthen Social Security," Contributions to Economic Analysis & Policy, Volume 1, Issue 1, 2002)
CBO Estimates That Bush's Plan Will Force Benefit Cuts (Including The Value Of Individual Accounts) That Will Grow From 23 Percent To 45 Percent. According to CBO, the President's plan "would reduce expected retirement benefits relative to scheduled benefits, even when the benefits paid from IAs under CSSS Plan 2 are included... For example, benefits for the 1980s birth cohort would be 30 percent lower, and benefits for the 2000s cohort would be 45 percent lower." (CBO, "Long-term Analysis of Plan 2 of the President's Commission to Strengthen Social Security," 7/21/2004, pp. 11 and Figure 2A)
Bush plan would tax Social Security individual accounts by 80 percent - or even higher. According to George Bush's own Social Security actuaries, his Commission's reform model two would "claw back" or tax 80 percent of your individual account at retirement. This is based on the risk-adjusted rate of return. If your investments do poorly, then you could get taxed more than 100 percent - not only would you lose your entire individual account but you would end up owing money to the government. (Social Security Office of the Actuary, "Estimates of the Financial Effects of Three Models Developed by the President's Commission to Strengthen Social Security," 1/31/2002. See page 75, based on estimates for a two medium earner couple retiring in 2042. Based on the risk-adjusted rate of return, the individual account is 26.6 percent of the guaranteed benefit but 21.4 percent of this gets clawed back.)
WRONG DIRECTION: Bush Chose Tax Cuts Instead of Strengthening Social Security and Raided Surpluses Each and Every Year
Instead Of Strengthening Social Security, George Bush Chose Tax Cuts For The Wealthiest That Cost More Than Three Times As Much As Saving Social Security. The present value cost of the Bush tax cuts is $11 trillion. That is more than three times as much as it would cost to save Social Security for 75 years. (Greenstein and Orszag, "Understanding the Social Security and Medicare Projections," Center on Budget and Policy Priorities, 4/2/2004)
George Bush Has Raided The Social Security Surplus In Each And Every Year He Was In Office - Totaling $509 Billion To Date. In 1999 and 2000 the budget was balanced without using any Social Security money. But under George Bush, the government has run an on-budget deficit each and every year, totaling $509 billion over four years.
Bush Made Social Security Privatization Plan A Centerpiece Of His 2000 Campaign. "We know the test of leadership. The issues are joined. We will strengthen Social Security and Medicare for the greatest generation and for generations to come... For younger workers, we will give you the option, your choice, to put part of your payroll taxes into sound, responsible investments." (Convention Acceptance Speech, 8/3/2000)
Bush Promised Not To Raid The Social Security Surplus. "My plan will keep all Social Security money in the Social Security System, where it belongs." (Bush Radio Address, 2/3/01)
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