At today’s Senate Budget Committee hearing, Senator Murray described the House Republican approach to tax reform, explaining that House Ways and Means Chairman Camp (R-MI) proposes putting every dollar of savings back into lower tax rates, primarily for those at the top—without investing a penny in boosting our economy or tackling our budget challenges.
Senator Murray noted that the House Republican Budget being debated this week goes a step further, by lowering the top tax rate so much that, according to an independent study of a similar proposal, middle income families would end up paying higher taxes.
Excerpts of Senator Murray’s remarks are below, and the full text is available here.
“…it’s very clear that tax reform that doesn’t ask the wealthiest Americans and biggest corporations to pay their fair share is simply fiscally irresponsible.
And every bipartisan group that has examined our budget situation has reached the same conclusion.
Now, I know that many of my Republican colleagues prefer a different approach.
Chairman Camp’s recent tax reform proposal would put every dollar of savings back into lower rates, primarily for corporations and those at the top of the income scale, and would protect the wealthiest Americans and biggest corporations from paying their fair share toward reducing our deficit and boosting the economy.
The House Republican Budget being debated this week would do all of this as well—but it goes a step further.
Their budget would push the top tax rate down to 25 percent, which means middle class families would have to pick up the tab for new tax cuts for the rich.
Giving tax breaks to millionaires while doing nothing to help working families keep more of their hard earned income is not only wrong-headed in terms of our budget, it’s also deeply unfair to families across the country who are up against a decades-long trend of rising costs and stagnant wages.
Apr 07 2014
Today, the Senate is expected to vote on bipartisan legislation to restore long-term unemployment benefits, which would help workers as they struggle to get back on the job. The bill would then move to the House of Representatives for consideration. At the Senate Budget Committee’s recent hearing, award-winning economist Dr. Raj Chetty explained how unemployment benefits help workers, communities, and the economy. Watch excerpts from the hearing:
Responding to a question from Chairman Patty Murray, Dr. Chetty refuted the claim that unemployment benefits create disincentives for people to work.
MURRAY: What can you tell us about the effect of unemployment benefits on families and the economy?
CHETTY: The concern that many people voice is that when you extend unemployment benefits, as has been voiced here, you potentially reduce the incentive for families to return to work… Now while [economic] theory says that that effect could be small, could be large, we now have good data that allows us to actually study what happens empirically in practice. And the best data - there are now numerous studies, using millions of data points - which indicate that these disincentive effects, while they exist, are quite small.
So when you extend unemployment benefits by say 10 weeks, you extend the amount of time that people stay out of work quite modestly. And even the longer time out of work that occurs appears to be driven by people trying to find a better job - a job that might work better for their skill set - taking advantage of those longer benefits to find the right match that ultimately will help the economy grow, rather than just idling their time and living off the system, as some people perceive. So I think theoretically those issues are important, and economists talk about them. Empirically, the data says those effects are not nearly as big you might have worried about.
During the hearing, Senator Bernie Sanders asked about impediments to consumer demand and the lack of jobs. Dr. Chetty responded by explaining that supporting people who are out of work with unemployment benefits helps boost the economy, because those struggling to find work spend those dollars in their communities.
CHETTY: Coming to your question about what would stimulate jobs and aggregate demand, there's good evidence if you give a dollar to a person below median income, much more of that is spent, than if you give a dollar to a person at the top end of the income distribution. So if you're trying to raise aggregate demand, these things are intricately linked.
SANDERS: Such as extending long-term unemployment, putting money into the hands of people who desperately need that money?
CHETTY: The marginal propensity to spend out of unemployment benefits is extremely high, so that, I think, would have a stimulative effect.
Dr. Raj Chetty is a professor of economics at Harvard University. In 2013, Chetty was awarded the John Bates Clark medal, given by the American Economic Association to the best American economist under age 40. Learn more about the hearing “Opportunity, Mobility, and Inequality in Today’s Economy” here.
Apr 07 2014
Take away the Medicare guarantee and shift the cost of health care onto seniors;
Make drastic cuts to investments in education, medical research, and transportation that create middle class jobs and long-term, broad-based growth;
And once again protect the wealthiest Americans and biggest corporations from paying a penny more toward their fair share.
Apr 07 2014
Following the release of the House Budget last week, a number of groups representing communities across the country weighed in on the drastic cuts in the proposal to programs and investments that are vital to families, seniors, workers, and the economy. Here is some of what just a few of those groups had to say:
Center on Budget and Policy Priorities: “Some 69 percent of the cuts in House Budget Committee Chairman Paul Ryan’s new budget would come from programs that serve people of limited means, our forthcoming report finds. These disproportionate cuts — which likely account for at least $3.3 trillion of the budget’s $4.8 trillion in non-defense cuts over the next decade — contrast sharply with the budget’s rhetoric about helping the poor and promoting opportunity.”
Center for American Progress: “While the House Republican’s budget plan claims to strengthen the safety net, the reality is it slashes health care, education, child care, and other job supports for struggling families in order to pay for tax cuts for the very wealthy.”
Young Invincibles: “This budget proposal would eliminate some of the most significant protections for young people. In an economy where many young adults are desperate for economic stability, this budget builds barriers between young adults and their ability to get back to work, pay for college, and afford health care.”
AARP: “Chairman Ryan’s proposed budget fails to address the high costs of health care and instead shifts costs onto seniors and future retirees. Repealing the benefits of the Affordable Care Act ignores the progress we’ve made to improve access to health care and protect against discrimination based on age, gender or medical history. Removing the Medicare guarantee of affordable health coverage for older Americans by implementing a premium support system and asking seniors and future retirees to pay more is not the right direction.”
Coalition for Health Funding: “...but our nation’s soldiers, like all Americans, rely on public health programs here on American soil. These programs discover cures for disease and keep our food and water safe. They provide needed mental health services to our returning wounded, and they help families rebuild their lives after natural disasters. Continued cuts to public health will do Americans more harm than good.”
National Education Association: “Americans are looking to Washington to stand up for them, to create opportunities for economic prosperity, and ensure a brighter future for the next generation. Ryan’s budget, unfortunately, falls far short. He continues to balance the budget on the backs of the nation’s most vulnerable—low- and moderate-income Americans, children, students, and seniors—while failing to demand corporations and the rich to pay their fair share. In short, his budget again makes a mockery of shared sacrifice.”
Institute For College Access and Success: “Despite bipartisan concern about rising college costs and student debt, the House Budget Committee’s fiscal year 2015 budget slashes funding for Pell Grants, forcing millions of Pell Grant recipients to borrow more, while simultaneously increasing the cost of their loans”
The evidence is clear: Climate change is real and its impacts are already being felt by every nation across the planet. The negative impacts of climate change are disproportionately borne by the poor and most vulnerable members of society. Adaptation is important, but as emissions of carbon pollution increase, there will be impacts that exceed the ability to adapt.