Chicago, IL
Ending Corporate Privilege and Putting Working Families First
Across the nation, governors and mayors face the worst financial picture in 20 years. Forty-three of our 50 states face revenue shortfalls due to the Bush economy and declines in tax revenues tied to federal tax giveaways for the very wealthy. Thirty-seven states confront deficits. The outlook for mayors is also grim, forcing elected officials to confront difficult choices as they seek to balance their budgets.
In response, many states and cities have chosen to cut services for working families. Twenty-nine states have cut education budgets; 25 public safety; and 22 health care. Fifteen states have combined cutbacks with layoffs of public employees, further eroding critical services and sapping morale and increasing stress for those workers who remain.
Faced with the largest budget deficit in the history of New Jersey, Governor James McGreevey put working families first. Bucking national trends against progressive taxation, the Governor eliminated a billion dollars in corporate tax loopholes as part of his administration's plan to resolve the unprecedented budget deficit.
Like other states, the tax burden in New Jersey has shifted onto working families. Corporate business taxes constituted 15% of total New Jersey state revenues in 1982, but only 7% in 2000. As corporate tax revenues declined, income tax revenues increased 479% and sales tax revenues increased 356%. Due to numerous loopholes, 75% of New Jersey corporations pay the minimum income tax of $200 - less than most working families.
Despite a withering corporate attack, Governor McGreevey and the state legislature enacted a plan to close corporate tax loopholes in order to address the state's budget crisis. Governor McGreevey courageously stood against the anti-tax, anti-government forces that have dominated American politics and successfully resolved the budget crisis in ways that protect working families. The Governor's actions demonstrate a fiscally responsible, progressive response to government budget crises in ways that restore equity and balance to the state tax system. Governor McGreevey's program - and his leadership in pursuing it - stands as a model for every state and for every public official.
The tenuous state of the Bush economy, which has left millions of working families reeling, and the recent spate of corporate scandals that has rocked workers' economic security and trust in business bears stark testament to the urgency of ending the era of corporate greed and governmental pandering to corporate special interests.
The AFL-CIO and its affiliates will continue to work to restore fairness and equity to federal, state and local taxation, to reverse the tide of tax breaks and special treatment for the wealthy and corporations, and to protect and expand vital public services. We call on all governors and local officials to do the same, by formulating plans to restore equity and balance in public budgets, including measures to close tax loopholes that allow corporations and the well-to-do to escape their obligations to a system from which they so richly benefit.