How many times have you heard these statements?

• President Bush cut taxes for the very rich.
• If we repeal the Bush tax cuts for the rich we could pay for national health insurance.
• Economic growth is leaving everyone but the rich behind.

Turns out, all these claims are false. There have been no tax cuts for the rich — they are bearing a larger share of the income tax burden than ever before. Raising marginal tax rates for the rich (principally on capital gains and dividend income) would likely raise government revenues by not one dime. And the poor benefit the most from economic growth. These are the conclusions of three new blockbuster NCPA studies:

• In “Did the Bush Tax Cuts Favor the Wealthy?”, Stephen F. Austin University economist Michael D. Stroup reports that the Bush tax cuts made the tax code more progressive, no matter how progressivity is measured. In fact, every major tax change (Republican or Democrat) over the past two decades has increased the share of taxes paid by the wealthiest Americans.

• In “The Bush Capital Gains Tax Cut after Four Years,” Wall Street Journal editorial writer Stephen Moore finds that the 2003 capital gains tax cut has led to more revenue for the Treasury.  The argument that the capital gains tax change would only benefit rich people has proven inaccurate. More than half the tax returns with capital gains income are from filers with adjusted gross incomes of $50,000 or less.

• In “Economic Freedom and the Trade-off Between Inequality and Growth,” NCPA Senior Fellow Gerald W. Scully draws on international data to conclude that economic freedom increases the rate of economic growth and improves the distribution of income.

Besides these studies, the NCPA has been busy in other areas as well. For instance, in the midst of financial market turmoil and the most significant Federal Reserve actions since the Great Depression, no one is in greater demand by the financial news media than NCPA Distinguished Fellow Bob McTeer. Because Reserve board members are largely silenced, McTeer, a former president of the Federal Reserve Bank of Dallas, is one of the few available experts qualified to help navigate the crisis. He appears almost daily on major television and radio programs including weekly trips to New York City to co-host CNBC’s Squawk Box.

Terry Neese, the NCPA’s newest Distinguished Fellow is focused on issues of special importance to women. In January, she addressed a standing-room only crowd at an NCPA briefing co-sponsored by the Congressional Women’s Caucus on Capitol Hill. Neese is working with members of Congress, including Kay Granger, Cathy McMorris Rodgers and Marsha Blackburn on such NCPA proposals as flexible employee benefits, portable health insurance and flexible working hours.

We are excited to announce iDebate, a new summer program that is a joint project between the NCPA, the General Tommy Franks Leadership Institute, and Oklahoma Christian University. iDebate is a five day leadership development camp for high school students and an opportunity to develop young leaders of character who are well informed about public policy issues. It is scheduled for August 3-8, 2008 and the NCPA is currently seeking funding sources to make this opportunity freely available to students of all economic backgrounds.

The 401(k) reforms proposed by the NCPA in collaboration with the Brookings Institution and passed by Congress a year and a half ago, finally became effective this January. This law gives employers a safe harbor against lawsuits if they automatically enroll their employees in 401(k) plans with diversified portfolios, unless the employee specifically opts out.

On a less favorable note, the Social Security/Medicare trustees announced in March that the unfunded liability in these two programs now exceeds $100 trillion (that’s trillion, not billion) – eight times the size of our economy. Most of this unfunded commitment is Medicare and no think tank has done more to find ways to reform the program than the NCPA.

In February, the Wall Street Journal published my editorial, “Markets and Medicare.” I argued that the Bush administration missed a golden opportunity since Congress is required by law to fast track his Medicare reform proposal. I also suggested the following reforms:

• Free the doctors by rewarding providers who raise quality and lower costs.
• Free the patients by allowing them to manage their own health-care dollars.
• Free the entrepreneurs by welcoming and encouraging better ways of meeting patient needs.

As we celebrate our 25th anniversary in 2008, we greatly appreciate your investment in the NCPA. Your generosity allows us to continue seeking innovative private-sector solutions to America’s most difficult public policy problems.

Warm regards,

John C. Goodman

President