Congressman Dennis Cardoza
18th Congressional District of California

WASHINGTON – Congressman Dennis Cardoza (D-Merced), a longtime supporter of targeted tax cuts, voted against the Republican tax plan today, blasting the package for ignoring the needs of working families throughout California’s Central Valley.  Cardoza supported the Democratic alternative which provides tax relief targeted to families who are most in need.

A report requested by Cardoza showed that the most families in the Central Valley would see little or no benefits from the Republican proposal to reduce taxes on capital gains and dividends, rather than creating new jobs and strengthening the economy. The report also showed that the full tax cut package heavily favors only 1% of taxpayers in the 18^th Congressional District.  This proposal contains many of the same elements of the President’s proposed $725 billion tax cut, but instead of eliminating taxes on dividends, it reduces tax rates on both dividends and capital gains.

“This proposal does nothing to help the unemployed and those truly struggling in our stagnant economy.   It squeezes important programs out of the budget, forcing cuts in Medicaid, child-care assistance, veterans’ benefits and more,” said Cardoza.  “In short, this bill compromises the long-term solvency of both the federal budget and the American economy.  It also further strains California’s budget, already devastated by the weak economy in our State.”

The 10-year $550 billion package centers on lowering the tax rate on dividends and most capital gains to 15 percent. Though costing far less than the president’s desired tax cut package of $726 billion, H.R. 2 costs dramatically more than the $350 billion that the Senate is proposing. Given the ever-increasing federal deficit, Rep. Cardoza believes that now is not the time to pass enormous tax cuts on to the most economically advantaged Americans.

Of Rep. Cardoza’s constituents, 80 percent would receive no benefit at all from the reduction of taxes on capital gains and 75 percent would get nothing at all from lowering taxes on dividends, according to the report prepared by the House Committee on Government Reform.  Further, 92% of households in the 18^th Congressional District would receive an average tax cut of only $42 under the capital gains and dividend proposals.

Cardoza believes that our economy is best served by pursing a strategy of responsible planning and fiscal discipline that will shrink, rather than grow, our national debt.  These guiding principles are good for the economy, the government, and most importantly, for American families.  “At a time when we need to be focusing on creating jobs and stimulating our economy, I find this tax cut package to be extremely irresponsible,” said Cardoza.

Cardoza supported an economic plan written by House Democrats that would offer targeted tax rebates and rate reductions for working Americans and small businesses, would create 1 million new jobs, keep America’s promises to veterans, invest in education and health care, extend unemployment benefits and provide additional assistance to states that are facing budget shortfalls, such as California.

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