Responding to the Shrink, Shift, and Shaft Tax Cut Agenda

by Chuck Collins

Seen on the Nonprofit Quarterly web site.

Meanwhile, federal tax cuts in 2001, 2002, and 2003 have fueled massive deficits and blocked possibilities for spending on human needs. Over 70 percent of these cuts went to the richest fifth of U.S. households. These tax cuts have “trickled down” to worsen state and local budget deficits, forcing deep and immoral cuts in social spending on poverty, healthcare, and education.

Almost every state in the union has faced terrible budget gaps in the last four years. While the situation this year has improved slightly, 24 states are facing budget gaps of over $35 billion in the coming year, according to the Center on Budget and Policy Priorities.

As the result of budget shortfalls, localities have laid off teachers, firefighters, police officers, and social workers; closed libraries and health clinics; and cut childcare, mental health services, public transit, and pollution control. And the list goes on.

Most of these state and local tax systems are very regressive, imposing a higher burden on the poor than the wealthy. In Washington, Tennessee, and Florida, for example, the lowest 20 percent of income-tax payers pay as much as 14 percent of their income in state and local taxes, whereas the wealthiest 1 percent of income earners pay less than 5 percent.


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