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Californians Must Engage In Battle for Fair Tax Plan

Friday May 16, 2003

With the war winding down, focus is shifting to the home front, to a sagging national economy and state deficits that threaten basic human services, and the need for an effective plan to restore our economy in a way that is fair to all taxpayers.  

President George W. Bush has proposed a half-trillion dollars in tax cuts as the centerpiece of his plan to achieve this. However, the Bush tax cuts are too large, poorly designed and highly inequitable. We are now engaged in a battle for a fair tax plan both for America and for California, and our new target is injustice. 

It is unjust to propose tax cuts that would divert $2.5 trillion dollars over the next decade from health care, Social Security, education and public safety, for tax cuts that would mainly benefit the wealthiest Americans.  

It is unjust that under the Bush plan the wealthiest 1 percent of Californians will get a tax cut averaging almost $36,000, while middle-income working families will average only $305. It is unjust that four million Californians will get nothing from this plan and nearly seven million will get less than $100.  

It is unjust that three-quarters of the elderly will get absolutely nothing from Bush’s proposed stock dividend tax exemption, because only one in four seniors receives even a dollar in taxable dividends. 

It is unjust and morally irresponsible to give ourselves tax cuts and leave future generations with an even higher tax and debt burden. These tax cuts will likely increase the total national debt, including what is owed to Social Security to $10 trillion dollars. Tax cuts financed by perpetual deficits will eventually slow the economy even more.  

President George Bush didn’t hesitate to invest $70 billion in the war in Iraq. Now he needs to show the same resolve — and the funding to go with it — to address the needs of working families and their children. 

Since the legislative session began in January, I have been seeking to define a balanced approach to our state’s $38 billion budget crisis. I support solutions that balance painful reductions with prudent revenue increases in the form of equitable tax and fee increases. To that end I introduced Assembly Bill 4, which will reinstate slightly higher tax rates for the state’s very top earners. This approach is nothing new — previously, Governors Wilson and Reagan adopted higher tax rates on a short-term basis to deal with budget crises during their administrations. The impact of the tax reinstatement on the state’s top earners would be completely offset by the last round of income tax reductions by the federal government.  

To encourage involvement, I initiated a letter writing campaign in the East Bay. The response has been overwhelming. Over the course of four Saturdays, 150 volunteers collected over 3,000 postcards calling on Congress to stop the Bush tax plan. Within the state, the postcards call for support of Assembly Bill 4, and for cuts in spending on state prisons at a time when state-funded programs in education, health care, public safety, senior services and the disabled face drastic reductions.  

Congress will make its decision on the federal tax cut later this month and Assembly Bill 4 is awaiting action in the Assembly. It is unacceptable to mortgage our children’s futures to pay for tax breaks for the wealthiest today. Now is the time for all taxpayers to join the battle for economic justice.  

State Assemblywoman Wilma Chan represents Oakland, Alameda and Piedmont and serves as Majority Leader. To get involved in the effort for a fair tax plan, call Raymond Ehrlich in Wilma Chan’s office at 510-286-1670.