Taxes And Budget: Render to Caesar, But Let The People Keep Their Own 

"I believe our country must be prosperous, but prosperity must have a purpose . . .to make sure the American dream touches every willing heart." 

                                                                               — George W. Bush 

            It takes both candor and courage to say, as George W. Bush has said, that, even in times of large surpluses, the economy is far from perfect and we should not be satisfied with the status quo.  Budget surpluses are the result of over-taxation of the American people. The weak link in the chain of prosperity is the tax system.  It not only burdens the American people; it threatens to slow, and perhaps to reverse, the economic expansion: 

• The federal tax code is dysfunctional.  It penalizes hard work, marriage, thrift, and success – the very factors that are the foundations for lasting prosperity.
  
• Federal taxes are the highest they have ever been in peacetime.
  
• Taxes at all levels of government absorb 36 percent of the net national product.   

            When the average American family has to work more than four months out of every year to fund all levels of government, it’s time to change the tax system, to make it simpler, flatter, and fairer for everyone.  It’s time for an economics of inclusion that will let people keep more of what they earn and accelerate movement up the opportunity ladder. 

            We therefore enthusiastically endorse the principles of Governor Bush’s Tax Cut with a Purpose:

• Replace the five current tax brackets with four lower ones, ensuring all taxpayers significant tax relief while targeting it especially toward low-income workers.
  
• Help families by doubling the child tax credit to $1,000, making it available to more families, and eliminating the marriage penalty.
  
• Encourage entrepreneurship and growth by capping the top marginal rate, ending the death tax, and making permanent the Research and Development credit.
  
• Promote charitable giving and education.
  
• Foster capital investment and savings to boost today’s dangerously low personal savings rate.

              This is more than just an economic program to promote growth and job creation.  It is our blueprint for the kind of society we want for our children and grandchildren.  It is a call to conscience, a reminder that, even in times of great prosperity, there are those who bear great burdens.  That is why, with the tax cuts we propose, while every taxpayer benefits, six million families — one in five taxpaying families with children — will no longer pay any federal income tax.

            It took a Republican Congress to stand up to the Internal Revenue Service by publicly exposing its abuses and enacting a Taxpayer’s Bill of Rights.  Within the simpler and fairer tax system proposed by Governor Bush, the IRS will be downsized and made less intrusive.  IRS rules should be understandable by all, enforced by few, with low-cost compliance.  We applaud the efforts of the Republican Congress to expand the use and availability of Individual Retirement Accounts. 

            In 1997 the Republican Congress cut the capital gains tax from 28 percent to 20 percent.  As a result capital gains for Americans doubled and federal government tax receipts from capital gains jumped from $50 billion in 1996 to $75 billion in 1997.   These tax cuts produce more economic growth and often more tax revenues.  We cheer their lowering of the capital gains tax rate and look forward to further reductions that will stimulate property sales and development to bring jobs and renewal to our urban neighborhoods.

            To guard against future tax hikes, we support legislation requiring a super-majority vote in both houses of Congress to raise taxes.  We will prohibit retroactive taxation and will not tolerate attempts by federal judges to impose taxes.  Because of the vital role of religious and fraternal benevolent societies in fostering charity and patriotism, they should not be subject to taxation.

            Income taxes and payroll taxes are the most obvious parts of the public’s tax burden but consumers foot the bills in higher prices for most of the user fees that are nothing but under-radar taxes.  Excise taxes of all kinds have snowballed, because they shift public resentment from government to the businesses that are forced to collect them.  One example is the gas tax of 1993.  Another is the phone tax imposed to finance the Spanish-American War — and still in place a century later.   We call for the immediate repeal of the phone tax.

STANDING UP FOR THE GREAT AMERICAN MIDDLE CLASS

But in President George Bush's America, where everyday costs are soaring and ordinary incomes are sinking, the middle class is struggling, and our economy is suffering.

Today, the average American family is earning $1,500 less than in 2000. At the same time, health care costs are up by nearly one-half, college tuition has increased by more than one-third, gas and oil prices have gone through the roof, and housing costs have soared. Life literally costs more than ever before – and our families have less money to pay for it. Three million more Americans have fallen into poverty since 2000. Average family debt is higher than ever. And as they lose the struggle to make ends meet, one out of every seven middle class families may be bankrupt by the end of the decade.

President Bush and the Republicans in Congress have ignored the middle class since day one of this Administration. They have catered to the wealth of the richest instead of honoring the work of the rest of us. They have promised almost everything and paid for almost nothing. And the middle class is shouldering more taxes, earning less money, and bearing higher costs. The bottom line for the middle class under President Bush and the Republican Party is this: Instead of working hard to get ahead, the middle class is working hard just to get by. 2004 Democratic National Platform Committee Report – 23

John Kerry, John Edwards and the Democratic Party believe in a stronger, more prosperous America for all our people. We believe in an America where the great American promise of upward mobility is alive and well. We believe in an America where the middle class is growing, our economy is thriving, and America is strong. And we have a plan to build that America.

Cutting taxes for middle class Americans. First, we must restore our values to our tax code. We want a tax code that rewards work and creates wealth for more people, not a tax code that hoards wealth for those who already have it. With the middle class under assault like never before, we simply cannot afford the massive Bush tax cuts for the very wealthiest. We should set taxes for families making more than $200,000 a year at the same level as in the late 1990s, a period of great prosperity when the wealthiest Americans thrived without special treatment. We will cut taxes for 98 percent of Americans and help families meet the economic challenges of their everyday lives. And we will oppose tax increases on middle class families, including those living abroad.

Helping families cope with rising costs. We must help Americans deal with the staggering increase in everyday costs of living, from insurance premiums to child care to the price of gas.

Today, thousands of businesses that would otherwise provide raises are using that money to pay climbing health care premiums. That is cutting wages for working people. Reforming health care, offering tax credits to pay for it, and cutting health costs will raise wages for working people.

College tuitions rose by 35 percent between 2000 and 2003, and this year, 220,000 Americans were priced out of college by its high costs. We will make college affordable for every qualified student with a tax credit for four years of college.

. . .

The price of gas is at an all time-high, placing an enormous burden on millions of Americans who have no choice but to drive to work. We will help cut costs in the short-run by halting additional stockpiling of oil reserves and working more effectively to ensure that OPEC increases production. For the long-run, we offer a detailed plan for energy independence.

. . .

Expanding the middle class. The dream of the middle class should belong to all Americans willing to work for it. We still have work to do as long as millions of Americans work full-time, fulfill their responsibilities, and continue to live in poverty. We will offer these Americans a ladder to the middle class. That means raising the minimum wage to $7.00, increasing the Earned Income Tax Credit and extending child credits so that parents who work full-time don't have to raise their children in poverty. It means working to eliminate hunger in our rural and urban communities. It means using our tax code and savings incentives to help families build their savings, become homeowners, and start businesses. And it means continuing on the path of welfare reform. We must match parents' responsibility to work with the real opportunity to do so, by making sure parents can get the health care, child care, and transportation they need. And we must expect increased responsibility from fathers as well as mothers by increasing child support enforcement and promoting responsible fatherhood together with religious and civic organizations.

Strengthening our cities. We will invest in the businesses, schools, and hospitals that metropolitan areas need to thrive. We will support quality housing opportunities and a balanced housing policy for all Americans, defending good rental housing and extending the American Dream of homeownership to more families. At a time when so many families are losing their homes and life savings to unscrupulous lenders, we will rein in predatory lending and expand access to mainstream financial services for urban families. And we will redouble our nation's commitment to closing the "digital divide."

. . .

Ending corporate welfare. Many American corporations today pay less than ever in taxes because of tax loopholes secured by powerful lobbyists. We will end corporate welfare as we know it. We will eliminate the indefensible loopholes in our tax code— from tax deals that have no purpose but avoiding taxes to the very shelters that Enron used to drive so many lives toward financial ruin. And we will eliminate the corporate subsidies that waste taxpayer dollars and undermine fair competition.

The Democratic Party understands that working people built modern America. We understand that today's global economy requires new rules, new skills, and new approaches, and we believe that the time-honored values of equal opportunity, fair play, and good rewards for hard work still apply. That's how we give all our people the chance to succeed. That's how we keep on building the America we believe in. That's how we keep the promise of America.

Taxation