Michigan Citizen Action
A progressive citizens lobby that champions the rights of all people.

Michigan Citizen Action is encouraging progressive organizations to join us in partnering with the Americans for Responsible Taxes (ART) coalition. ART is an amalgamation of concerned communities and working families united to repeal the Bush-era tax cuts for the wealthiest, reinstate the estate tax to at least 2009 levels, close tax loopholes, and inform Americans and their elected officials about the importance of responsible tax and budget policies. ART will engage in grassroots activism, legislative lobbying, public outreach, and communications work to advance responsible taxation.

The gap between the wealthiest and the rest of us has grown wider as the tax burden has declined; the federal tax rate for the wealthiest 400 Americans has dropped from 29 percent to less than 17 percent in the past 15 years. According to the Bureau of Economic Analysis, federal, state, and local income taxes consumed 9.2 percent of all personal income in 2009, the lowest rate since 1950. This is not the 1950s, and the United State needs federal investments in health care, energy, education, and defense. Our national recovery – and the future of our country – depends on corporations and the wealthy meeting their responsibilities by paying their fair share of taxes.

ART supports four goals as the pillar of responsible fiscal reform that meets our national priorities and helps support hard-working families.

1. Reverse the Bush tax cuts for the wealthiest Americans. Restore the top two marginal tax rates to 36 and 39.6 percent. For individuals who make $200 000and couples who make $250 000, rates would go from 33 percent to 36 percent, and individuals and couples who make $375 700 would go from 35 percent to 39.6 percent. Increase the tax rate for capital gains and dividends to no less than 20 percent, up from the 15 percent it has been for several years. Eliminate other loopholes and preferences that benefit those earning more than $250 000 per year.
2. Reinstate the estate tax. The estate tax should be made permanent at a top rate of no less than 45 percent, with an exemption preferably lower than $3.5 million per individual or $7 million per couple. The estate tax expired at the end of 2009, leaving it at zero right now. It will reset to 55 percent with a $1 million exemption at the end of 2010 if no action is taken.
3. Eliminate tax loopholes for corporations and the wealthy; hold Wall Street accountable. Prevent offshore profit shifting by corporations. Close offshore tax havens so that they wealthy can’t dodge taxes. Eliminate subsidies for oil and gas companies. Impose a financial responsibility fee on banks and/or a tax on financial transactions to compensate taxpayers for the Wall Street bailout. Tax “carried interest” – the tax hedge fund managers pay on the profit they receive from managing the fund. These wealthy individuals do not currently count their income as wages or ordinary income, instead paying the current capital gains tax rate of 15 percent. If they were subject to income tax as wage earners the tax rate for their group would be 35 percent under the tax provisions as in current law.
4. Ensure economic security for every working family. Make permanent the American Recovery and Reinvestment Act expansions of the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Credit. These tax credits can reduce the tax owed below zero and result in a net cash payment to the taxpayer beyond their own payments into the tax system. These credits are used as work incentives and antipoverty supports for low-income families. The EITC for families has two provisions that will expire at the end of 2010 and need need to be preserved: reducing the marriage penalty for married couples by raising the income level at which the EITC begins to phase out to $5000 for 2009 and 2010; and providing greater benefits for the more than three million families with three or more children. The Child Tax Credit is equal to 15 percent of the amount of a family’s earnings above the income threshold – set at $3000 for tax years 2009 and 2010 in the Recovery Act – up to $1000 per child. If no action is taken on these improvements, families will have to make more than $12 850 to qualify for this tax credit.

Michigan Citizen Action and ART need your support to make these pillars a reality. If you or your organization would like to join this coalition, please fill out our Statement of Support.