Senate Passes Tax Cut for Millionaires

by Mike Hall, May 11, 2006

The U.S. Senate approved a $70 billion tax cut package—the centerpiece of which extends President Bush’s capital gains and corporate dividend tax cuts for the rich through 2010. 

The 54-44 vote was mostly along party lines, with most Democrats lining up against the tax giveaway to the wealthy and most Republicans voting for it. The May 11 vote followed the House’s approval the day before.

AFL-CIO President John Sweeney said the tax bill is “a perfect example of the Republican leadership’s upside-down priorities while working families are struggling with skyrocketing health care costs, vanishing pensions and record gas prices.”

Sweeney added:

This latest gift to the rich will add to our ballooning national debt while providing little, if any, relief to working families who are still reeling from Bush’s cuts to vital federal programs.

Senate Minority Leader Harry Reid (D-Nev.) said:

Bush’s tax plan offers next to nothing to average Americans while giving away the store to multi-millionaires. The tax reconciliation bill giveaway on capital gains and dividends will do much more for ExxonMobil board members than it will do for ExxonMobil customers. Their tax plan takes the country in the wrong direction.

The top 1 percent of taxpayers will pocket an extra $82,000 a year, while the middle 20 percent will see just an extra $20 in tax savings, according to the Urban Institute-Brookings Tax Policy Center.

Dean Baker, co-director of the Center for Economic and Policy Research, dubbed the latest round of tax cuts “temporary assistance to the needy rich.” Take a look at what the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer says about this new welfare program for the rich in a column on TomPaine.com.

The Center on Budget and Policy Priorities says:

Whether one looks at the conference agreement bill from the standpoint of fiscal responsibility, of budgetary integrity, or of fairness, the agreement is seriously flawed.…[The bill] will increase deficits, while further widening disparities between the most well-off households and Americans of more modest means.

Earlier this year, to help pay for the tax cuts, Congress passed and Bush signed a $40 billion spending cut package that targeted education, health and child care and other vital programs for working families. 

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