House stimulus bill squanders funds needed for crisis

Press Release
For Release Oct 25, 2001
Contact: Betsy Leondar-Wright
(617) 423-2148 x113

House stimulus bill squanders funds needed for crisis

Wealthy Americans reject tax cuts for rich

As layoffs mount, the anthrax crisis deepens, and vulnerability to smallpox terrorism becomes clearer, the House of Representatives voted 216-214 to give budget-busting hand-outs to the wealthiest individuals and corporations. The $100 billion stimulus bill, H.R. 3090, would not only be ineffective for economic recovery, it would be a dangerous misuse of funds urgently needed for crisis response.

  • A hundred million antibiotic treatments for anthrax infection and better baggage screening machines at every U.S. airport would cost less than the $12.8 billion speed-up of income tax rate reductions for the best-off 30% of taxpayers.
  • Quadrupling the Centers for Disease Control budget, extending unemployment benefits for three million people for 13 weeks, federalizing airport security with no ticket price increases, and modernizing Amtrak would cost less than the $40.2 billion tax cut for accelerated depreciation.
  • Fourteen profitable corporations such as IBM and General Motors would get $6.3 billion in rebates of their Alternative Minimum Tax (AMT) payments back to 1986. These companies together had in 2000 a net worth of over $217 billion and $43 billion in cash in the bank. Total AMT rebates would cost $25 billion, more than the total value of the rebates the bill gives to the 39% of American households who didn’t get a full rebate this summer.

Response to the bill from members of UFE’s Responsible Wealth (RW) project, who are in the top 5% of wealth or income, has been overwhelmingly negative.

"I’d be embarrassed to take a tax cut at a time like this," says New York RW member Richard Perl, President of Pacific Partners International Investments, Inc. "With so many in my city grieving, digging through rubble, and losing their jobs, my government should be asking me to pitch in, not handing me a bonus. The priorities of this stimulus package are upside-down. It is not just ineffective, it’s unpatriotic."

RW member Dal LaMagna, CEO of Tweezerman Corporation in Glen Cove, NY, adds, "We’ve had nine interest rate cuts this year and still nobody’s investing. Why should manufacturers like my company react any differently to tax incentives? What drives businesses to expand is demand for our products, so what we need is a tax and spending package that puts money into the hands of people most likely to spend it."

United for a Fair Economy is a national organization based in Boston that spotlights growing economic inequality.