Hope Street Group Calls on Candidates to Tackle the Debt Tax

Non-partisan think tank says national debt
is like $62,000 credit card balance for each family

The Hope Street Group, a non-partisan policy research organization founded and operated by young business leaders from the private sector, today warned that the nation's current fiscal climate is set to speed the rate of growth of America's national debt, resulting in an increase to the "Debt Tax" that now costs every American more money than the estate, capital gains and so-called "marriage" taxes combined ever did. An op-ed published by Hope Street Group members in today's Boston Globe calls on the Democratic presidential candidates to address this problem head-on, starting the discussion at the November 4th Rock the Vote debate.

In a new paper titled "The Debt Tax: A drain on our pocketbooks and the economy," the Hope Street Group details the actual cost of servicing the interest payment on the national debt to each American household, and coins the term the "Debt Tax" to describe this cost that simply spends taxpayers' dollars without producing any corresponding benefit to taxpayers.

"A government carrying a large national debt is analogous to an individual running up a big balance on a credit card, where the hole just gets deeper and deeper until there is no way out of debt," said Byron Auguste, Chairperson of the Hope Street Group. "Today's national debt is the equivalent of a $62,000 balance on each American family's credit card."

The paper argues that the Debt Tax is likely to increase over the next several years due to rising interest rates and an increase in the gap between government spending and revenues. As the tax cuts of 2001 and 2003 go into affect, government revenue are projected to drop by $1.35 trillion and drive up interest payments on the debt by more than $400 billion over the next eight years.

"Even if interest rates remain constant," said Auguste, "this year's budget alone will add approximately $22 billion to annual interest payments. That's an additional $200 in Debt Tax for every household in America." The Hope Street Group is calling on the presidential candidates to come up with a comprehensive plan to address the problem of the Debt Tax.

The full text of "The Debt Text" is attached, and can be found at http://www.hopestreetgroup.org. The full text of today's op-ed is attached, and can be found at http://www.boston.com/news/globe/editorial_opinion/oped/articles/2003/11/03/the_biggest_tax_is_debt/.

The Hope Street Group is a nonprofit, nonpartisan organization founded by a new generation of business leaders to promote domestic policies of opportunity and growth. Its initial policy platform, "Building the Opportunity Economy," was released in June 2003.