Al Gore on Tax Reform 2000 Democratic Nominee for President; Former Vice President

Sub-sections under Tax Reform:
• Critique of Bush tax plan
• Other issues under Tax Reform

$500B to people earning under $100K; via 30 targeted cuts

Gore selectively targets his tax cuts to married couples and families-single, childless Americans are generally ignored-and also offers credits to nearly 30 million of the working poor who have little or no tax liability. Gore has proposed about 30 targeted tax cuts, generally in four areas: retirement savings, health care, education and the environment. Bush, instead, emphasizes cutting tax rates, especially the highest rates, so that most of the cuts flow to the people who pay most of the taxes.

Federal matching funds for poor and middle class savings

Q: How would your tax cut benefit a single woman with no dependents?
• GORE: If you make less than $60,000 a year and you invest $1,000 in a savings account, you’ll get a tax credit which means that the federal government will match your $1,000 with another $1,000.
• If you make less than $30,000 a year, you put $500 in a savings account, the federal government will match it with $1,500.
• If you make more than $60,000 and up to $100,000, you’ll get a match, but not as generous.
• You’ll get access to lifelong learning and education, help with tuition if you want to get a new skill or training.
• If you want to purchase health insurance, you will get help with that.
• If you are part of the bottom 20% or so of wage earners, then you will get an expanded Earned Income Tax Credit.
• And if you have an elderly parent or grandparent who needs longterm care, then you will get help with that.

Except for wealthiest, exempt people from estate tax

BUSH: Eliminate the death tax completely because people shouldn’t be taxed twice on their assets. It’s either unfair for some or unfair for all. I think if you’ve got tax relief, everybody benefits.

Claim that every family is eligible for tax cut is unlikely

ANALYSIS: This statement is only true if every middle class family has children in day care or in college.

An accounting firm assessed how Gore’s proposals would affect hypothetical families, and their report found that the following would receive no tax breaks:
• Single person with no children earning $39,000
• Retired couple earning $59,000
• Single earner couple with two children earning $78,000

Cut taxes for 99% of middle class, not the wealthiest 1%

BUSH: We’re going to hear some phony numbers about what I think. Over the next 10 years, there’s going to be $25 trillion of revenue. Why don’t we pass $1.3 trillion of that back to the people who pay the bills? I want to share some of that money with you, so you’ve got more money to save and dream for your families. It’s the difference between government making decisions for you and you getting more of your money to make decisions for yourself.

GORE: I agree that the surplus is the American people’s money. That’s why I don’t think we should give nearly half of it to the wealthiest 1%, because the other 99% have had an awful lot to do with building our prosperity.

Target surplus at national debt, rainy days, & education

Gore would like to continue the “disciplined” and “prudent” economic policies of the Clinton administration. In particular, he would:
• Pay off federal debt in public hands by 2012.
• Set aside $300 billion of the surplus as a reserve in case rosy projections do not materialize.
• Introduce tax credits for retirement accounts targetd at low- and middle-income Americans.
• Reduce the “marriage tax penalty” by increasing the standard deduction for married couples.
• Offer tax credits for health insurance, make the child-care credit refundable, provide tax relief for stay-at-home parents, introduce tax credits for long-term care.
• make up to $10,000 in college tuition costs tax deductible; create tax-advantaged accounts to save for education and training; create a new refundable After-School Tax Credit.

End marriage penalty; reform estate tax; targeted cuts

Under the tax plan the other side has proposed, for every ten dollars that goes to the wealthiest one percent, middle-class families would get one dime. And lower-income families would get one penny. It gives the most to those who need it the least -- and the least to those who need it the most. And that’s just wrong. Instead, let’s cut taxes for the people who have the hardest time paying taxes and saving for the future.

Lower taxes for working families with targeted tax reform

Offer tax cuts to those who need them most. With this plan, the tax burden on the typical family will be the lowest in 50 years.
• Eliminate the marriage penalty for millions
• Provide incentives to save thru Retirement Savings Plus Accounts
• Help pay for college thru the College Opportunity Tax Cut
• Expand the childcare tax credit and make it refundable
• Help families pay for long-term care needs
• Expand the Earned Income Tax Credit
• 25% refundable tax credit for health insurance

Tax cuts to benefit middle-class, not just the rich

Don’t eliminate gas tax; ask oil interests to charge less

Bush said, “The long-term solution is an energy policy. The short-term solution is the price of crude on the market. The administration ought to convince OPEC to increase the supply of crude oil.”

Eliminate the marriage penalty for working families

$500B in tax cuts targeted to working families

Declaring that the “right kind of tax cuts are good for our economy,” Gore today discussed his plan for a $500 billion in tax cuts for working families. Among other things, Gore’s plan would:
• Eliminate the marriage penalty for working families.
• Make health care more affordable [via] a 25% tax credit for premium costs for each employee of a small business that decides to join a purchasing coalition.
• Help families care for children and loved ones [via] making the existing child care tax credit refundable; a new refundable After-School Tax Credit; and a $3,000 tax credit for long-term care.
• Help families save for college and job training tax free [via] tax deductions for up to $10,000 in college tuition costs.
• Create 401 (j) accounts to allow families and employers to put money away to save for education and training tax-free.

Help caregivers with tax reform, nursing home alternatives

Gore called for giving families with long-term care needs and their caregivers a $3,000 tax credit and reforms making it easier for Medicaid to cover care at home and in community settings in addition to nursing homes. The total cost of Gore’s new National Caregiving and Family Support Initiative is nearly $30 billion over ten years. Gore would:
• Provide caregivers with support services, information, and respite. Under Gore’s plan, states would expand the availability of adult day care, respite care and home care services. At least 80% of Gore’s Initiative would be set aside for adult day care, home care coordination and other respite services.
• Make tax credit available to Americans with long-term care needs -- and friends and family who care for them.
• Make it easier to provide care at home, in the community.

$250B over 10 years in targeted tax cuts

Save Social Security, Medicare, and address debt before cuts

Rules out tax increase in good economic times

Eliminate estate taxes for the little guy, not the wealthy

Bush’s tax plan is class warfare on behalf of billionaires

Impossibly large tax cut will yield big debt and recession

That wouldn’t just be bad for our budget and our economy, it would be potentially devastating for America’s families and American business. That huge tax cut would mean higher interest rates, which would make it harder to buy a home and which would choke off borrowing and investment in the private sector. And that, in turn, would mean lower productivity and lower levels of economic growth. Our people have worked too hard and achieved too much to waste it on the wrong kind of tax cut that puts the economy at risk.

We both target our tax cuts: Bush targets the rich

The difference is, the Bush plan targets the benefits primarily to the top 1% - families who make, on average, $1 million a year. My tax cut targets the benefits to middle-class families. Senator McCain said it best when he raised concerns about then governor’s plan during the primaries: “I don’t think Bill Gates needs a tax cut, but I think you and your parents do.

Comparison of wealthy tax cut to middle class exaggerated

Gore’s assertion was misleading, if not wrong. Using an analysis by Citizens for Tax Justice, the average annual tax cut for members of the top 1% under the Bush plan would be $46,072. Gore relied on a definition of middle-class at the low end of the spectrum - a range of $24,400 to $39,300 per household, with an average of $31,000. The average tax cut for that group would be $453 under the Bush plan, CTJ said. Multiplied times 130, the total is $58,890 - $12,818 more than the average tax cut for the top 1%. The vice president’s example would have worked only if there were no more than 101 people in the audience. Campaign aides said Gore had in mind comparing to someone making $1 million a year.

Single wealthy person’s tax cut equal to roomful of people

GORE: Look, this isn’t about Gov. Bush, it’s not about me. It is about you. If everyone here in this audience [of several hundred] was in the middle of the middle class, then the tax cuts for every single one of you, all added up, would be less than the tax cut his plan would give to just one member of that top, wealthiest 1%. Now, you judge for yourselves whether or not that’s fair.

BUSH: Fifty million Americans get no tax relief under his plan.

GORE: That’s not right.

BUSH: And you may not be one of them; you’re just not one of the right people.

GORE: That 50 million figure, the journalists are the keepers of the scorecard and whether or not you’re using facts that aren’t right. And that fact is just not right.

Claim that Bush benefits “top 1%” only true with estate tax

ANALYSIS: Gore uses a report by Citizens for Tax Justice, an advocacy organization whose mission includes “requiring the wealthy to pay their fair share.” CTJ says that 42.6% ($546B) of Bush’s tax cut would go to the top 1% income group, those who earn at least $319,000 annually. CTJ INCLUDES repeal of the estate tax, which they say will help the top 1% almost exclusively.

Gore has applied CTJ’s figure of 42.6% to the $1.3 trillion value that Bush gives his tax cut, and comes up with $546 billion in tax cuts for the wealthiest 1%. And he contrasts that with the roughly $475 billion in Bush’s spending initiatives. But if the estate tax is REMOVED from the equation, Bush’s tax cut falls to $1.06 trillion and CTJ says 30% of it goes to the wealthiest 1%. That totals $318 billion, about $157 billion less than Bush’s new spending initiatives.

Yes, it’s your money-but it’s your programs too

Too large a tax cut would wreck economy & military readiness

Bush defended his tax-cut proposal. I’m not changing my opinion on it. It’s the absolute right thing to do for America. Bush’s plan would reduce federal tax rates across the income spectrum, lowering the highest rate to 33% from 39.6% and the lowest rate to 10% from 15%.

Bush’s tax cut gives average family only 62 cents

In fact, if you add it up, the average family would get about enough money to buy one extra Diet Coke a day. About 62 cents in change. Let me tell you: that’s not the kind of change I’m working for.

I’ll fight for tax cuts that go to the right people - to the working families who have the toughest time paying taxes and saving for the future. I’ll fight for a new, tax-free way to help you save and build a bigger nest egg for your retirement. I’m talking about something extra that you can save and invest for yourself. Something that will supplement Social Security, not be subtracted from it.

Bush’s tax plan is “economic snake oil”

$792B tax cut is a “risky tax scheme”