Latest press release (8/18) from Stan Matsunaka...

[RobertDevereaux]

August 18, 2004

Tax Cuts for Wealthiest Force Prices
Up Throughout the Economy

$ Billions In Inflated Charges Amount
To ‘Secret Tax’ On The Middle Class

LOVELAND –Stan Matsunaka, candidate for Colorado’s 4th Congressional District seat, charged that Representative Marilyn Musgrave’s vote approving the Administration’s latest round of tax cuts is directly responsible for price inflation in critical areas, from education to health care to gasoline.

“We were told this was a tax cut that will benefit everyone, and that simply isn’t the case,” said Matsunaka. “Money that the Treasury oesn’t have to begin with is being turned over to the wealthiest at a record pace. The effect is to force prices up on products and services that affect us all.

“Tax cuts were substituted for responsible spending,” Matsunaka added. “Those resources could have been used to defray costs on a variety of fronts, and they weren’t. What we have now is a secret tax on the middle class.”

Matsunaka cited several cases where cost increases have far outpaced inflation in key sectors of the economy. “Examples of the administration’s secret tax hit us every day,” he said.

College Tuition: The steep tuition increases at state-supported colleges are making it more difficult for students to pursue their degrees and, ultimately, play a key role in the nation’s economy. At Colorado State University, for instance, tuition jumped nearly 16 percent in the past two years. If the federal government had played a greater role in student support through additional grants and loans, the impact of these tuition hikes could have been avoided.

Health Care: Premiums on healthcare coverage have shot up at least 15 percent year after year. Congress has made no effort to curb these spiking prices or defray costs, which puts a huge burden on workers and businesses alike. Out-of-control increases also have forced thousands into the ranks of Colorado’s 700,000 uninsured. But Congress chose not to act.

Gasoline: The average cost of a gallon of gasoline has jumped from $1.11 in 2002 to $1.86 today, a 75-cent increase in just two years. By refusing to take serious steps to lessen our reliance on Middle Eastern oil, the United States is vulnerable to arbitrary price increases. This is essentially a tax for not watching out for our own best interests.

“In each of these cases, Mrs. Musgrave and her Congressional colleagues could have played a key role by defraying costs in education or setting policies that made us less vulnerable to surging oil prices,” said Matsunka. “In each of these cases, they established their priority and the priority was tax cuts for the rich.”

Matsunaka’s charges follow two recent developments involving the Bush Administration and tax policy:

A report from the Congressional Budget Office says that federal tax cuts from 2001 and 2003 actually resulted in tax increases for those earning $51,500 to $75,600 a year;

The Administration is discussing doing away with the federal income tax and replacing it with a national sales tax, or consumption tax.

According to Matsunaka, this tax policy shift would place a greater tax burden on the middle class and lower-income earners, who pay a greater portion of their incomes on the very items this new tax would hit: food, clothing and shelter.

“With Congress unable to say ‘no,’ with Mrs. Musgrave and her Republican colleagues in the hip pocket of this Administration, the middle class is in for a rocky ride on taxes--the ones you can see and the ones they’re keeping secret,” said Matsunaka.

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