It's Tax Day! Let's talk about fairness

Today is Tax Day and DC is abuzz with efforts to use the tax code to take on poverty and the wealth gap. From President Obama’s call for a balanced approach to deficit reduction, to yesterday’s action in Congress on the Buffett Rule, to RESULTS efforts to use the tax code to preserve the EITC and Child Tax Credit. On this Tax Day, I’d like to take this opportunity to reflect a bit on the state of tax policy, and what it means for the fight to end poverty in the US.

First, let’s look at the facts. The program lifts more people out of poverty is none other than a tax provision. The Earned Income Tax Credit (EITC) is the largest poverty-reduction programs in the U.S. The Center on Budget and Policy Priorities estimates that in 2010 alone, the EITC lifted 5.4 million people out of poverty, including 3 million children. It is also estimated that the EITC lifted 3.4 million women and girls out of poverty in 2010. This has important implications for those women’s projected employment and earnings levels, as well as Social Security retirement benefits. In a new But tax policy is broadercorporate tax loopholes, cutting the estate tax, or cutting income tax rates on the highest tax bracket, the wealthy in America are overview from Economic Policy Institute on why and how the tax code could be more progressive, or their report The Facts Support Raising Revenues from the Highest-Income Earners.)

Progressivity in the tax code, i.e. the higher your income, the more you pay, is important not just because of where the money comes from, but also where that money goes. Taxes are the only reason our government can pay for the important services it provides, including education, infrastructure, defense, health care, and the social safety net. Well over 90 percent of government revenue comes from taxes, with a nearly 50 percent coming from individuals. Former U.S. Supreme Court Justice Oliver Wendell Holmes had it right when he famously said, “I like paying taxes. With them I buy civilization.”

Unfortunately, many of our elected officials in Washington choose to ignore the connection between taxes and our “civilization.” Instead, they use the guise of fiscal discipline and deficit reduction to justify draconian cuts to important services that millions of Americans rely upon, all the while refusing to consider any options to raise revenue. In fact, they push for more tax cuts, putting further strain on the programs that protect and support working families.

The Bush-era tax cuts of 2001 and 2003 are prime example. Wealthy households benefitted tremendously from these cuts. Yet these cuts have consequences. Each millionaire will receive an average of $143,000 in 2012 from the Bush tax cuts. That is equal to providing 18 at-risk children access to Head Start. And the budget that recently passed out of the House only RESULTS specifically focuses on protecting and expanding tax credits for low-income working families as well as using the code to help them build savings and assets, we also recognize that these issues are part of a larger context. The “Occupy” movement and the99spring.com are putting the issue of wealth inequality front and center, and it couldn’t come at a more important time. We are at a crossroads in America about the kind of country we want to be. Are we a nation that coddles the ‘have’s” at the expense of the “have-not’s”? Or are we a nation that stands together to ensure that all Americans have an equal opportunity to achieve the American Dream?

RESULTS is committed to justice and fairness in the tax code, and supports the larger movement to close the astounding income and wealth gaps facing our nation today.

To learn more about taxes, check out this round-up of some of my favorite tax-related recent reads and resources:

• Check out the99spring.com or Click here to find tax day events or to see if there are any training events happening in your town!
• Wondering where your tax dollars went in 2011? Check out this feature from the National Priorities Project.
• Learn more about the immediate budget choices facing Congress today, and the impact it will have n families: As the Coalition on Human Needs emphasized in their recent report Self-Inflicted Wounds: Protecting Families and Our Economy from Bad Budget Choices. Similar information was also presented in a recent webinar – Impact of Looming Budget Cuts on Low-Income Families, our Communities, and our Economy: Tools and Resources to Help You Fight Back
• Heard that only half of Americans pay taxes? Read the Center on Budget and Policy Priorities’ latest on the Thinking About Tax Policy?
• Institution on Taxation and Economic Policy has a great set of background materials on tax policy basics: http://www.itepnet.org/policy_briefs/policy_briefs.php
• Check out a video of a recent event focused on Tax Equity in DC – event includes folks from United for a Fair Economy, the Center on Budget and Policy Priorities, Citizens for Tax Justice, and others.
• And of course, check out the tax section of our Economic opportunity campaign.