June 26, 1997

Liberal Attacks Hit Seniors

There is a pattern to an individual's economic life just as surely as there is a pattern to one's overall life. Early in life, people live on the income from their current wage earnings. However, at the same time they begin setting aside money for the time when they will cease working and their income would otherwise decline. When that time comes, their income shifts from current wage earnings to past wage earnings -- their retirement savings.

The Taxpayer Relief Act (TRA) wants to make this income cycle as natural as the life cycle it follows. Yet there are many liberal critics who are attacking the very provisions that will make it easier for seniors to save, invest, and then use the assets they have accumulated over their lifetimes. In their pursuit of partisan politics, liberals are running over seniors.

The TRA Helps Every Taxpayer at Every Stage of Life

The Savings Stage

• By providing a $500 per child tax credit, TRA helps the young family not only raise their children but save money for their future.
• By providing education credits, TRA helps the mature family give not only their children the means to achieve financial security in their lives, but also allows today's parents' to begin saving for their own future.
• TRA directly helps families save for their retirement by expanding IRA investments.

The Withdrawal Stage

• TRA directly helps seniors when it comes time to begin withdrawing money that they have saved and invested -- the capital gains provision is particularly helpful to seniors, who realize a disproportionate share of capital gains.
• According to the Congressional Budget Office (CBO), 30 percent of capital gains income goes to people age 65 and above. This should not be surprising, seniors own:

* 42% of stocks

* 43.5% of taxable bonds

* 43.9% of tax-exempt bonds

* 40.9% of mutual funds

* 29.7% of investment real estate

* 28.6% of all non-housing assets and

* 27% of all capital gains assets.

* In each of these cases, seniors are the largest owning age group.

• Finally, TRA's estate tax provisions allow seniors to pass more of their lifetime savings on to their children so that they can start their own families or keep the businesses that they have operated as a family in the family.

TRA Helps Seniors

• TRA directly provides 37 percent of its ten-year net tax relief to seniors.
• Of the $238.9 billion in tax relief that TRA provides over ten years, $87.6 billion directly helps seniors:

* Investment & Savings -- $50.2 billion (capital gains = $24 billion)

* Estate Tax Relief -- $37.4 billion

Liberals Looking for an Issue, Rather than Looking Out for Seniors

• Liberals have tried so hard to make the tax debate one that will divide America into artificial classes that they have paid no attention to the real people they will hurt.

• They have also managed to conveniently forget that in 1993 they supported raising $24.6 billion (over five years) in taxes on Social Security benefits.