Colorado's $8 Billion Iraq Tax

As millions of Coloradans file their income taxes, it is appropriate to bring attention to the tax we are paying for a war that has cost Colorado and our country so dearly. The human and economic costs of the Iraq war have been enormous. The Bush administration and right-wing members of Congress, while claiming they are against taxes, are spending our tax dollars on Iraq with serious consequences here at home.

It's time to call the war in Iraq what it is: a massive tax on American families, taxpayers and our children. Here in Colorado we have poured billions of dollars and many troops into President Bush’s endless war. The Iraq war has entered its 6th year and surpassed the tragic milestone of 4,000 troop deaths, yet President Bush would keep our troops there indefinitely and U.S. Senator John McCain says he is “fine with” keeping our men and women in Iraq for 100 years.

Cost Of War By The Numbers
Cost of war for Colorado[i]	$8 Billion
Cost of Iraq war per family of 4	$35,000
Total cost of the Iraq war	$3 Trillion
Total number of U.S. troops killed[ii]	4,025
Total number of Colorado troops killed[iii]	54
Total number of Colorado troops wounded[iv]	478
Colorado troops ever deployed (as of January 31, 2008) [v]	20021
Colorado troops currently serving  (as of January 31, 2008)	3046[vi]

America cannot afford to continue an endless war in Iraq. The cost in blood and treasure has been devastating to our state and our country. President Bush, Sen. McCain and their allies in Congress maintain a singular focus on Iraq, which is reflected in our taxes – 40 percent of which will be devoted to the military this year. But instead of strengthening our forces those dollars will be spent on a war that has stretched our military to the breaking point, eroded our security here at home and pushed America into what most believe is a recession. It is time to raise awareness of the unseen costs of Bush’s singular focus on the war in Iraq and focus on strengthening our economy, our schools and healthcare system, and real security.

Iraq War Damaging American Economy for Decades to Come

Nobel Laureate economist: U.S. will be facing costs of Iraq for decades. The full cost of the war, according to Joseph Stigltiz, is $3 trillion.  Additionally, “every month we stay in Iraq and Afghanistan is really costing us some $22 billion; every year, more than $250 billion. In another two years, the tally will exceed another half trillion.” [Testimony to JEC, February 2008]

Economists see long-term damage from Iraq war. Much of the problem is that every month of combat adds more than $10 billion to a U.S. debt that now tops $9 trillion. At some point, government debt comes due and the Treasury Department either must pay it off or roll it over and pay more interest, just like a family facing monthly credit card bills. Higher government borrowing also could push up interest rates, making it more expensive for consumers to borrow for home mortgages and businesses to finance investments. [Reuters, 3/13/08]

Nine in Ten Americans Say Iraq War Contributing to U.S. Economic Problems. Americans overwhelmingly think that the Iraq war has contributed to US economic problems – 89 to 10 percent [CBS/NYT, 4/7/08].

$3 Trillion Dollar Iraq War Driving Up Oil Prices. Nobel Prize-winning economist Joseph Stiglitz, who says the Iraq war could end up costing $3 trillion when factoring in combat and other long-term related costs, also blames the war for part of the run-up in world oil prices. [Reuters, 3/13/08]

Bush Administration Statistics	Jan 20^th, 2001	NOW
Gas prices[vii]	$1.37	$3.20
Unemployment Rates[viii]	4.2 %	5 %
Uninsured Under 65[ix]	39 million	47 million
Crude Oil Prices Per Barrel[x]	$29.59	$103.44

Americans Feeling the Squeeze From Upside Down Priorities

More than 70 percent of economists now agree that the economy is already in a recession, according to a Wall Street Journal poll[xi]. Yet President Bush and Sen. McCain continue to pour billions of dollars into the Iraq war and back economic policies that favor wealthy special interests. Rather than invest in the areas that America’s most vulnerable families rely on, Sen. McCain’s economic proposal consists of more of the same Bush policies: tax cuts that skew toward corporations and millionaires.

Over the next 10 years, extending the 2001 and 2003 tax cuts would cost our country $3.8 trillion, not counting added interest.  The benefits would disproportionately go to the wealthiest: 

• $1.2 trillion for tax breaks for the top 1% (annual incomes above $450,000 in 2008). 

• $834 billion for tax breaks for millionaires (the top 0.3%)

In just one year (2012), extending the tax cuts would cost $353 billion:

• $109 billion for tax breaks for the top 1%.  Average tax cut:  $67,000.
• $77 billion for tax breaks for millionaires.  Average tax cut:  $162,000.[xii]

Thanks mostly to tax cuts for capital gains – the super-rich are paying taxes at lower rates than middle-class workers.  In 2005, the 400 highest-income taxpayers – with an average income of $214 million – paid federal income taxes at an average rate of just 18 percent, down from 30 percent in 1995.  That’s a tax reduction of $10 billion for the “Fortunate 400,” as The Wall Street Journal dubbed them, or $15 million each. [xiii]

The centerpiece of Sen. McCain's plan to stimulate the economy is large tax cuts for corporations. It would deliver $3.8 billion in tax cuts to the five largest American oil companies, according to an analysis released by the Center for American Progress Action Fund.[xiv]

[xv]

 Due to economic developments and the Bush administration policies that favor the wealthy over the poor and middle class, income inequality is on the rise. Low- and middle-income families have been largely left behind since the late 1990s, despite years of economic prosperity.  Average incomes actually fell by 2.5% for those in the bottom fifth of the income scale and rose by just 1.3% for those in the middle fifth.  Meanwhile, those in the top fifth saw incomes climb 9%.[xvi]

Iraq War Leaving U.S. Military Stretched Dangerously Thin

Eighty eight percent of military officers believe the military is stretched too thin.  A study found that of the military officials polled, “88 percent believe the demands of the Iraq war have ‘stretched the U.S. military dangerously thin.’” [CNN, 2/19/08]

Punaro said there was an appalling gap in readiness. “We think there is an appalling gap in readiness for homeland defense, because it will be the Guard and Reserve that have to respond for these things,” said Ret. Maj. Gen. Arnold Punaro, Commission on the National Guard & Reserves. [Washington Post, 2/1/08]

Goheen said we have piecemealed our military to death.  “We have absolutely piecemealed our forces to death,” said John Goheen, National Guard Association of the United States. [San Diego Union-Tribune, 2/1/08]

Pentagon doesn’t have resources to respond to disaster in the U.S. The Commission on National Guard and Reserves release a report that concluded that the military is not in a position to be able to protect our country from nuclear, chemical or biological attack inside the U.S. because of the repeated deployments to Iraq and Afghanistan. “We looked at their plans. They're totally unacceptable,’ said commission chairman Arnold Punaro, a retired Marine Corps major general. ‘You couldn't move a Girl Scout unit with the kind of planning they're doing,’ Punaro said of plans drafted by U.S. Northern Command, the part of the military responsible for homeland defense.” [ABC News/Reuters, 1/31/08]

Governors: Bush Administration Must Relieve Strain on National Guard

California Gov. Arnold Schwarzenegger: “I think it is not fair to the state for the federal government to go into a war situation and then to take from us the equipment…Every time our National Guards leave, they take with them equipment but they don't bring it back. So there's only so long they can do that.” [San Diego Union-Tribune, 2/25/08]

Iowa Gov. Chet Culver: “I want much more support for the Iowa National Guard…They have served with honor and distinction but also with stress and strain. We need more services (to address) their injuries, their equipment, to provide for their needs when they return. These are real heroes and they have needs that must be attended to.” [Gazette, 2/24/08]

Montana Gov. Brian Schweitzer: “Pushed the administration for more equipment for National Guard troops and better treatment for those who return with post-traumatic stress disorder, or PTSD.” [Billings Gazette, 2/26/08]

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[i] National Priorities Project, http://www.nationalpriorities.org/costofwar_home, accessed 3/12/08

[ii] Iraq Casualties, http://www.icasualties.org/oif/, accessed 3/12/08

[iii] Iraq Casualties, http://www.icasualties.org/oif/Statecity.aspx, accessed 3/12/08

[iv] Iraq Casualties, http://www.icasualties.org/oif/WndByState.aspx, accessed 3/12/08

[v] Department of Defense, 2/29/08. Numbers include troops in Kuwait, Qatar & other areas that are part of the two operations. Listed by home of legal residence.

[vi] Department of Defense, 2/29/08. Numbers include troops in Kuwait, Qatar & other areas that are part of the two operations. Listed by home of legal residence.

[vii] Energy Information Administration, http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html, Accessed 3/13/08

[viii] Bureau of Labor Statistics, http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000, Accessed 12/10/07

[ix] US Census Bureau, accessed 1/18/08

[x] Energy Information Administration, http://tonto.eia.doe.gov/dnav/pet/hist/rwtcM.htm

[xi] Wall Street Journal poll, March 13, 2008.

[xii] Aviva Aron-Dine, Center on Budget and Policy Priorities, “The Skewed Benefits of the Tax Cuts: With the Tax Cuts Extended, Top 1 Percent of Households Would Receive Almost $1.2 Trillion in Tax Benefits Over the Next Decade” (March 28, 2008).

[xiii] Aviva Aron-Dine, Center on Budget and Policy Priorities, “Capital Gains Tax Cuts Slashed Taxes of Top 400, While Their Incomes Soared” (March 27, 2008).

[xiv] Center for American Progress Action Fund, “The McCain Plan to Cut Oil Company Taxes by Nearly $4 Billion”

(March 27, 2008).  http://www.americanprogressaction.org/issues/2008/pdf/oil_tax.pdf

[xv] Center for American Progress Action Fund, “The McCain Plan to Cut Oil Company Taxes by Nearly $4 Billion”

(March 27, 2008).  http://www.americanprogressaction.org/issues/2008/pdf/oil_tax.pdf

[xvi] Center on Budget and Policy Priorities, “Pulling Apart: A State-by-State Analysis of Income Trends” (April 2008).