Posted November 29, 2005 to Career News | Section Home | Print

Study Verifies Impact of Tax cuts on Blacks

By Henry Allen Hurst

''The Jobs and Growth Tax Relief Reconciliation Act of 2003 will deliver substantial tax relief to 136 million American taxpayers by ensuring that Americans have more to spend, to save and to invest. This legislation is adding fuel to an economic recovery. We have taken aggressive action to strengthen the foundation of our economy that every American who wants to work will be able to find a job.'' -- President George W. Bush, May 28, 2003

WASHINGTON (NNPA) – A recent study conducted by United for a Fair Economy, a Boston, Mass.-based economic policy group, reports that many Americans won't have much to be thankful for this holiday season because of tax cuts that favor the wealthiest Americans.

''As the nation prepares for our annual feast of bounty and thanksgiving, many U.S. families will not be participating,'' said Anisha Desai, UFE's program director and a co-author of the report. ''This is because the multiple breadwinners each family needs these days don't all have jobs. Of those that do, many are not making enough money to pay for turkey and trimmings for everybody in the family.''
The nonprofit organization's 2005 study, ''Nothing to Be Thankful For: Tax Cuts and the Deteriorating U.S. Job Market,'' asserts that the president's prediction that the 2001 tax cut would translate into more than 5.5 million jobs has fallen short of its goal. The organization also says the jobs created after the enactment of the cuts are not ''quality jobs'' paying at least $16 per hour.

''President Bush's Jobs and Growth Tax Relief Reconciliation Act of 2003, far from delivering on the promises made to create 5.5 million new jobs, has carved out a new low in job recovery after a recession,'' said Scott Klinger, who also co-authored the report and is director of UFE's tax policy group. ''The president's tax-cutting policy is a failure in this regard, and we need to recognize it as such.''

UFE also reports that changes in tax rates have no ''discernible effect'' on employment, which can be proven when cuts proposed by any administration in the past 60 years are examined. Instead, UFE says, tax cuts are the least of many variables that determine job growth. For example, the group says, economic trends such as strides in computer technology create some jobs and eliminate others.

''A lot of jobs that are lost each year are manufacturing jobs,'' said Liz Stanton, director of research at UFE and co-author of the report. ''As these technologies develop, a computer or robot can replace people.''

The group does charge, however, that there is considerable evidence that tax cuts increase budget deficits.

UFE says that the tax cuts lack so much merit that the current weakness in job creation is unprecedented since World War II era. According to the report, Black employment is at 89.6 percent, compared to 95.2 percent for Whites and Latino workers average more than $10,000 per year less in earnings than Whites.''No workers have really benefited from President Bush's tax policies, but Blacks and Latinos have suffered disproportionately,'' said Gloribell Mota, a bilingual education specialist at UFE.

UFE also holds tax education programs and says that participants are not only overwhelmingly unknowledgeable about Bush's tax cut package, but they lack information on taxes overall.
''When it comes to Bush's tax cuts,'' said Mota, ''people don't connect it with how it will benefit them in the long run. To a lot of people, a tax cut always sounds good. People don't think about public services like police, fire departments, emergency medical and public schools.

''These things are going to cost more to maintain, and places where there's a lot of poverty and not a lot of tax revenue are going to feel it more. Tax cuts have to come from somewhere, and it's going to come out of your pocket.''