WASHINGTON - April 14 - Huge tax cuts for the wealthiest Americans have robbed the federal government of much needed revenue that could help fund programs for children, the Children's Defense Fund (CDF) said today. According to statistics released by CDF, the lost revenue could provide enough funds in 2004 to pay for Head Start for all eligible children, provide comprehensive health insurance for the nation's more than nine million uninsured children, and ensure that all poor families have affordable housing.
The Bush Administration's tax cuts of 2001 and 2003 heavily favored wealthy Americans while offering little or nothing to working families. In 2004, the average millionaire can expect to receive a tax cut of over $100,000. By 2010 when the tax cuts are fully implemented, the richest 1 percent of Americans will have received 52 percent of the benefits from the tax cuts, according to the Urban-Brookings Tax Policy Center.
Corporations are also reaping huge benefits from the new tax cuts. Business tax cuts alone amounted to $44.3 billion in fiscal year 2002 and are projected to be $64 billion in FY 2004. These tax breaks, combined with the increased use of tax loopholes, shelters, and subsidies, have resulted in corporate tax levels that are among the lowest seen in the last 70 years. According to a recent GAO report, between 1996 and 2000, 61 percent of American corporations paid no income taxes at all, and in 2000, 94 percent paid less than 5 percent of their total income in taxes. The revenue lost as a result of the business tax cuts in 2002 would have provided enough income to allow all of the nation's 5.4 million poor families with children to escape from poverty that year.
At the same time that the Administration pursued generous tax cuts for the wealthy?which were not paid for in the budget?it failed to aid 12 million American children by speeding up the refundability of the Child Tax Credit (CTC). It would also have provided the average poor family of three with an additional $193. The Administration fought for more tax breaks for millionaires, while denying poor families this modest amount that would have cost roughly 1 percent of the 2003 tax bill.
"This April 15th should serve to remind us that the Administration is favoring corporations and the wealthy rather than aiding the millions of families with children who are the backbone of this nation, many of whom are struggling to stay afloat," said Deborah Cutler-Ortiz, Director of the Family Income Division at the Children's Defense Fund.