Al Gore's Family Tax Cuts Will Not Risk Prosperity

"Our people have worked too hard and achieved too much to waste it on the wrong kind of tax cut that puts the economy at risk. We need targeted, affordable tax cuts for families that keep our budget balanced and keep our prosperity growing." -- Al Gore

"Prosperity itself is on the ballot" in one week. Voters face big choices on tax cuts. Al Gore's middle-class tax cuts would fit within a balanced budget to ensure that all Americans benefit from the nation's current prosperity. George W. Bush's massive tax cut would put prosperity in peril, returning the nation to deficits and making it "impossible" to eliminate the debt. Almost half of Bush's tax cuts are targeted toward the few who make more than $300,000 a year.

Gore's family tax cuts are designed to help middle-class families afford childcare and long-term care, pay for college and save for retirement. His $500 billion package would fit within a balanced budget that pays down the debt every year. Debt reduction will help keep interest rates lower, helping families with more affordable car loans and mortgage payments, and fueling investment and continued economic growth.

The independent Citizens for Tax Justice found that 43 percent of Bush's $1.6 trillion tax cut is targeted directly at the nation's wealthiest one percent. The American Academy of Actuaries has released a study that definitively states that Bush's economic plans would return the nation to deficits and "make it all but impossible to eliminate the publicly held national debt."

Gore discussed the different values and priorities reflected in the two opposing tax plans. He focused on five specific differences:

• Gore's First Priority is Prosperity. Gore devotes two-thirds of the unified budget surplus to debt reduction. He even underspends the on-budget surplus, saving one out of every six dollars in a "rainy day" reserve fund in case the projected surplus does not fully materialize.

• Bush's First Priority Is a Massive Tax Cut. Bush spends $2 on tax cuts and other spending proposals for every $1 he devotes to paying down the debt. Eight Nobel Prize economists and nearly 300 other economists confirmed that Bush's proposals will risk prosperity. [Open letter, 10/10/2000]

• Gore Targets His Tax Cut for the Middle Class. Middle-class families making between $20,000 and $100,000 a year are eligible to benefit from Gore's proposals, which include Retirement Savings Plus accounts, tax-deductible college tuition, childcare and long-term care credits and other tax relief.

• Bush Targets His Tax Cuts for the Wealthy. The independent Citizens for Tax Justice has found that 43 percent of Bush's $1.6 trillion tax cut is targeted to benefit the wealthiest one percent of Americans -- those who make more than $319,000 a year. For every $10 Bush would give to the wealthiest one percent, middle-class families would get one dime.

• Gore's Plan Reflects Middle-Class Values. His plan would make up to $10,000 a year of college tuition tax deductible. Retirement Savings Plus accounts would encourage couples to save tax-free for retirement with government incentives that would help build a nest-egg of up to $400,000. A $3,000 long-term care tax credit would help families care for an elderly loved one. Gore would expand the tax credit to help families afford childcare and provide tax relief for parents who stay at home with infants.

• Bush's Plan Favors the Wealthy at the Expense of the Middle Class. It gives the wealthiest one percent of Americans an average of $46,000 a year at the expense of the majority of middle-class families who, on average, would get 62 cents a day. When asked at the final presidential debate whether his tax cut primarily benefits the wealthiest the most, Bush responded, "Of course, it does."

• Gore's Plan Helps the Hardest Pressed Working Families. According to an independent study from Deloitte & Touche, Gore's tax proposal would provide $878 in tax relief a single mother of two making $22,000 a year from an expansion of the childcare tax credit and the Earned Income Tax Credit (EITC).

• Bush's Leaves Out the Hardest Pressed Working Families. According to the same study, Bush's tax plan would provide no relief for a single mother of two making $22,000 a year.

• Gore's Smaller Plan Leaves Resources for Other Important Priorities. By reducing the debt, Gore can eliminate what is, in effect, the government's third largest spending program -- interest payments on the national debt. He can devote interest savings to extend the life of Medicare to 2030 and Social Security to 2054. His fiscal discipline also allows investment in education to reduce class size; investment in health care to expand access to coverage to all children; and investment in a voluntary prescription drug benefit for everyone in Medicare.

• Bush's Plan Leaves Few Resources for Other Priorities. In fact, Bush's tax cut would give more to the wealthiest one percent than Bush would devote in new spending to education, health care, prescription drugs and national defense combined.