Faithful tax policy

July 27, 2012 at 5:07 am Leave a comment

What principles guide faithful tax policy?

• The federal government must maintain a circle of protection around funding for programs that are vital to hungry and poor people.

• Deficit reduction is important, but must not be accomplished at the expense of further suffering of people who are struggling to feed their families.

• The government should reduce projected deficits by curtailing unnecessary military spending, eliminating tax breaks for the wealthy, and reducing benefits for people who are not poor. Spending cuts alone, however, will be insufficient to provide significant deficit reduction, and Congress should increase taxes before cutting spending on programs for hungry and poor people.

• Tax increases should maintain or increase the current level of progressivity of the overall tax burden and mitigate the concentration of wealth.

• Congress should maintain at the current levels important tax credits such as the Earned Income Tax Credit and the Child Tax Credit, which have been proven to reduce poverty and encourage work.

Bread will support various policy initiatives consistent with these values:

• The continuation of the current Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) benefit levels.

• The expiration of the 2001 and 2003 tax cuts for income earned over $250,000, which would generate nearly $830 billion over ten years.

• The elimination of ineffective tax expenditures, including tax breaks for wealthy individuals and corporations. In all, tax deductions, exemptions, and credits cost the government over $1 trillion each year. These tax expenditures amount to another form of government spending, often catering to politically powerful groups

• The restoration of the estate tax to at least 2009 levels, which exempts the first $3.5 million from taxation (effectively $7 million for couples) with a marginal tax rate of anything above $3.5 million at 45 percent. The 2010 tax compromise raised this to $5 million exemption ($10 million for couples) with a 35 percent marginal rate. Even under the 2009 rules, only 3 of every 1,000 estates would have owed this tax in 2013.

• A net increase in revenue in any tax reform legislation.

• A deficit reduction package in which spending cuts are accompanied with a significant contribution from tax revenues.

See the entire statement here:

http://www.bread.org/hunger/budget/pdf/faithful-tax-policy.pdf

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Entry filed under: Issues.

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