Letter to the House on Tax Votes
July 31, 2012
This week, the House of Representatives will take two votes that offer very different visions for America. The decision about whether to extend tax cuts for the middle class or for the top two percent of earners will determine whether we as a nation will put the American Dream within greater reach for every American, or whether we will continue to cater only to the wealthiest. The National Education Association strongly urges you to:
- Vote YES on extending tax cuts for the middle class — those earning less than $250,000 a year — as the Senate has already done (S. 3412).
- Vote NO on extending tax cuts for the top two percent of earners in our nation (H.R. 8).
Votes associated with this issue may be included in the NEA Legislative Report Card for the 112th Congress.
NEA believes that the future strength of our nation depends on ensuring a fairer tax system in which everyone does his or her part, and that includes the richest two percent. It is clear that the current system is unfair, putting the burden for economic recovery and deficit reduction on the shoulders of the middle class, while allowing the wealthiest two percent to avoid paying their fair share. The facts are startling:
- A hedge fund manager making millions of dollars from speculating on oil futures pays a lower tax rate on his profits than a school teacher pays on the salary she earns from educating our children. (James B. Stewart, New York Times, Questioning the Dogma of Tax Rates, 8/19/2011, p. B1).
- People who earn more than $1 million a year get an average tax break of $143,000 from the Bush-era tax cuts, while people making about $50,000 a year get an average tax break of about $1,000. (Urban-Brookings Tax Policy Center, Individual Income and Estate Tax Provisions in the 2001-10 Tax Cuts, Table T11-0209, 7/5/2011, p. 1).
- Nearly 1,500 people who made more than a million dollars paid no federal income taxes in 2009. (National Economic Council, The Buffett Rule: A Basic Principle of Tax Fairness, 4/10/2012, p. 5).
- America’s 400 richest families have seen their effective federal income tax rate drop by 60 percent over the last 50 years, plummeting from 42 percent to 18 percent. (David Cay Johnston, Tax Notes, Is Our Tax System Helping Us Create Wealth?, 12/21/2009, Comparing Income Growth and Income Tax Burdens in 1961 and 2006, p. 1376).
- The federal corporate income tax rate is 35% percent but because of loopholes and other factors corporations pay an average effective tax rate of about 25 percent. And in 2011 corporations paid just a 12 pecent rate. (Congressional Budget Office, The Budget and Economic Outlook, Fiscal Years 2012 to 2022, January 2012, Figure 4-3, p. 89).
The wealthiest in our country already receive the biggest tax breaks. However, we cannot afford to keep giving tax cuts to those who need it the least. If we continue to give tax cuts to the rich, we will not be able to protect middle-class priorities like education and Medicare from deep cutbacks. Giving tax cuts to the richest two percent also makes it harder to bring the budget deficit under control.
Americans applaud financial success. But, when the rich get tax breaks they do not need and the country cannot afford, somebody else has to make up the difference—and that is not right. It is time to start making our tax code fair to average people who work hard and play by the rules. To get our nation back on track, we need everyone to do their part—and ending the Bush tax cuts for the richest two percent is a good first step.
It is time to put partisanship aside and do what is right for middle class families and for our nation as a whole. We urge Congress to step up and be bold — to extend tax cuts for the middle class and to allow tax cuts for the top two percent of earners to expire.
Thank you for your attention to these very critical issues.
Director, Center for Advocacy
Director of Government Relations