Wealthy Say, "No, Thanks" to Tax Cuts

Press Release from United for a Fair Economy
April 6, 2005
Contact: Bob Keener, (617) 423-2148 x103, bkeener@faireconomy.org

Wealthy Say, "No, Thanks" to Tax Cuts

Responsible Tax Pledge Targets $69 Billion in Tax Breaks for Rich

BOSTON-A group of wealthy Americans today announced that they would turn down their share of the $69 billion in tax cuts that went to the wealthy in 2004, and they called on other wealthy people to redirect their federal tax breaks to support fairer taxes through a campaign called the Responsible Tax Pledge.

"It's obscene that Washington is handing out tax breaks to millionaires with one hand and shredding the safety net with the other," said Marta Drury, Responsible Wealth member. "I want it to stop, so I'm calculating my 2004 tax cut and donating it to organizations fighting for responsible, fair and adequate taxes. I don't believe that people like me with incomes over $200,000 need $69 billion in tax cuts."

According to data from the Tax Policy Center, taxpayers who made more than $1 million received an average federal income tax break of $123,592 in 2004. This compares to $383, the average tax break in 2004 for the two-thirds of taxpayers who make less than $50,000 per year.

For the wealthy individuals who have taken the pledge this year, the average estimated tax break in 2004 was $20,000. For several, the tax break was more than $100,000.

Based on data from the Tax Policy Center, Responsible Wealth calculates that the total of tax breaks to those who made more than $200,000 in 2004 was $69 billion.

"The next time a politician says we can't afford to fund something you care about, ask yourself if $69 billion per year would help," said Scott Klinger, co-director of Responsible Wealth. "When you hear that the only choices we have are to cut budgets, increase the deficit or increase your taxes, remember that $69 billion in tax breaks went to people who made more than $200,000 last year."

Responsible Wealth is helping taxpayers educate themselves about their share of the tax cuts. The amount each taxpayer receives from recent changes in the federal income tax is buried in the calculations of his or her individual income tax. Responsible Wealth has created an automated, online calculator that individuals can use to calculate their personal 2004 tax break. It can be found at https://faireconomy.org/join/RTPCalculator05.html.

The Responsible Tax Pledge is designed to enable wealthy recipients of tax cuts to redirect their unwanted and unneeded "windfall" to watchdog and grassroots organizations working for fairer taxes. Since 1998, it has provided hundreds of thousands of dollars in funding through mechanisms such as the Fund for Tax Fairness at the Tides Foundation. For example, the Maine Citizen Leadership Fund, which recently led the successful fight against a California-style property tax cap initiative, received a grant from the fund. And in Washington State, which has the most regressive tax system in the country, a grant went to a new coalition organizing for changes in state tax policy.

Responsible Wealth (http://www.responsiblewealth.org) is a national network of business people, investors and affluent Americans who are concerned about the deepening wealth divide in America and who advocate widespread prosperity. It spearheads the highly publicized effort to preserve the estate tax.

Average Value of Bush Tax Cuts in 2004

2004 Income*

Share of Taxpayers

Share of Total Tax Cuts

Average 2004 Tax Cut

More than $1,000,000 0.2% 15.3% $123,592
$500,000 - $1,000,000 0.4% 5.5% $21,470
$200,000 - $500,000 2.3% 12.3% $7,637
$100,000 - $200,000 9.3% 24.5% $3,826
$75,000 - $100,000 7.9% 12.4% $2,264
$50,000 - $75,000 14.0% 12.4% $1,287
$20,000 - $50,000 32.9% 15.0% $660
Less than $20,000 32.6% 2.5% $105

Source: Responsible Wealth calculations based on data from Tax Policy Center, April 8, 2004. (Includes most provisions in the 2001 and 2003 acts, EGTRRA and JGTRRA; excludes education provisions.)
*Includes wages and salaries, investment income, and government benefits on a pretax basis.

United for a Fair Economy is a national non-partisan non-profit organization that raises awareness of the dangers of growing economic inequality.