Oppose legislation that will make last year’s tax cut permanent

Dear Representative:

In a few days, the U.S. House of Representatives is expected to consider legislation to make permanent the tax reductions that were enacted last year. Taxpayers for Common Sense, an independent budget watchdog, urges you to oppose this legislation as it is likely to further increase the anticipated budget deficits for this year and next.

According to the Congressional Budget Office, eliminating the sunset in the 2001 tax bill would reduce projected surpluses by nearly $400 billion by 2012. When debt service is included, the passage of this measure pushes the total cost of the tax cut to $2 trillion. Furthermore, in the decade after 2012 the cost of the tax reductions increases to at least $4 trillion and perhaps substantially more because debt service costs will increase as less of the national debt is retired.

The full brunt of this legislation will fall on the Treasury just as the baby boomers begin to retire. As you may recall, just a few days ago the Social Security trustees reported that the benefits due will exceed revenues collected sometime around 2017. With fewer revenues, transferring any resources to social security will prove very difficult.

As enticing as passing a tax bill is, especially during "Tax Week," we strongly urge you to consider the longer-term budget and economic situation. Passage of this legislation will only make balancing the budget and preparing the economy for the future more difficult than it already appears to be.

A better course of action for you and your colleagues is to reduce wasteful spending across government. Just last week, Taxpayers for Common Sense and other organizations released the 2002 Green Scissors Report (www.greenscissors.org) that recommended reform or elimination of 78 programs that would save taxpayers $54 billion. Reducing spending and a balanced tax policy is the key to economic growth and a balanced budget.

Taxpayers for Common Sense Action urges you to oppose making last year's tax cuts permanent. TCS Action may use votes on or in relation to this legislation in our 2002 Taxpayer Scorecard.

Sincerely,

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