CAGW Dispels Myths about Economy, Taxes 

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today released its first in a series of Reality Checks to run in tandem with the Democratic and Republican Party Conventions.

Myth #1:  Corporate welfare creates prosperity.  From the Democratic Party Platform:  “We believe the private sector, not government, is the engine of economic growth and job creation…Based on the model that has helped launch some of America’s most successful companies, we will establish new investment corporations to give small and medium-sized businesses access to capital.  And we will support the growth of high-technology ‘clusters’ that invest in new industries around research institutions.”

Reality Check:  The reliance on tax-funded investment corporations and technology “clusters” for a chosen few companies contradicts the platform’s assertion that the private sector is the engine of economic growth and job creation.  The federal government already sponsors corporate welfare programs like those referred to in the platform such as the $173 million Advanced Technology Program (ATP), which duplicates private sector work.

Myth #2:  Tax hikes will bring prosperity.  From the Democratic Party Platform:  “We should set taxes for families making more than $200,000 a year at the same level as in the late 1990s, a period of great prosperity when the wealthiest Americans thrived without special treatment.  We will cut taxes for 98 percent of Americans and help families meet the economic challenges of their everyday lives.”  Sen. John Kerry (D-Mass.) wants to “roll back George Bush’s tax cuts for the wealthy so that we can invest in education and health care.”  Sen. Hillary Clinton (D-N.Y.) would take the tax cuts “away from you on behalf of the common good.”

Reality Check:  The fact is, the wealthiest Americans do not receive special treatment.  According to the Internal Revenue Service, the richest 5 percent of taxpayers, who make at least $130,000 per year, account for 53.3 percent of total federal individual income taxes.  How much more blood can be squeezed out of that stone?  If any Democrat wants to forgo the 2001 tax cuts and help reduce the national debt, he or she can go to http://www.publicdebt.treas.gov/opd/opdfaq.htm#opdfaq42.  Since October, 2003 approximately $505,000 has been contributed to this fund.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.