[Congressional Record Volume 140, Number 75 (Wednesday, June 15, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
              TAXES AND THE URUGUAY ROUND TRADE AGREEMENT

  Mr. MURKOWSKI. Mr. President, recently, the Wall Street Journal 
reported that the administration is considering proposing a series of 
tax increases to pay for the lost tariff revenues that will result as a 
consequence of the implementation of the Uruguay round GATT trade 
agreement.
  According to the Journal, the following tax increases may soon be on 
the table: $4.8 billion from a 4-percent tax on radio and television 
stations and others for the use of the radio spectrum; $1.5 billion by 
reauthorizing the Superfund hazardous waste cleanup tax and using part 
of a surplus that has accumulated; $1.3 billion from changing the 
inventory accounting rules for retailers; $600 million from a gambling 
tax on gambling that exempts State lotteries; $500 million from taxing 
employer-provided parking, and we have had some experience with this in 
this body; $500 million from requiring companies that take advantage of 
the possession tax credit--section 936--to file quarterly taxes; and 
$200 million from taxing more chemicals as ozone depleting chemicals in 
that category.
  In addition to the $9.4 billion in tax increases that will be needed 
over the next 5 years, the administration is considering cutting 
agricultural export subsidies by $1.6 billion and farm subsidy payments 
by $1.5 billion. It should be noted that these spending cuts are 
effectively mandated by the terms of the GATT agreement.
  So what we have, Mr. President, really, is the specter of nearly $10 
billion in tax increases that will be necessary to implement the GATT 
agreement. I question the wisdom of this approach.
  In a letter President Clinton sent me on May 3, he stated: ``This 
agreement will create hundreds of thousands of American jobs and new 
economic opportunities at home.'' According to a booklet the President 
included with his letter, the Uruguay round, when fully implemented, 
should add $100 to $200 billion to the U.S. gross domestic product 
annually. In addition, the Commerce Department's International Trade 
Administration recently estimated that over the next 10 years, the 
output of goods and services in the United States will increase by more 
than $1 trillion as a result of the GATT agreement.
  Mr. President, there is little doubt in this Senator's mind that the 
GATT agreement will significantly benefit this Nation's economy because 
it will reduce barriers blocking our access to world markets and create 
a more fair and comprehensive set of world trade rules. If the 
administration is correct in its estimate that the GATT agreement will 
increase GDP annually by $100 billion, it is almost a certainty that 
increased Federal revenues from income and corporate taxes will far 
exceed the revenue loss that will result from the reduction in tariffs.
  Currently, individual income and corporate income taxes are slightly 
more than 10 percent of GDP. This percentage is projected to remain 
fairly steady at 10.3 percent of GDP over the next 5 years. If, in the 
first few years of the phasein of the GATT agreement, our added GDP is 
merely $20 or $25 billion a year--not the $100 to $200 billion that the 
administration estimates after full implementation--individual and 
corporate tax revenues will easily offset the revenues lost by tariff 
cuts.
  If we are to believe the administration's $100 billion annual GDP 
gain, corporate and individual income tax revenues would rise by more 
than $10 billion a year.
  The reason the administration is scrambling to find ways to pay for 
the GATT agreement is because our budget pay-as-you-go rules require 
offsets when legislation reduces Federal revenues. Yet, I believe that 
we should not have to find new sources of revenue to pay for the GATT 
agreement because I believe it will bring in far more in income and 
corporate income taxes than will be lost through tariff cuts. If not, 
something is wrong and perhaps we better stop spending and cut spending 
in specific areas.
  I hope that when the Congressional Budget Office estimates the effect 
that the GATT will have on Federal revenues, its analysis will reflect 
the economic growth that will surely result from implementation of the 
agreement. Narrow economic analyses that ignore such feedback to the 
economy should not be used as a basis to require unwarranted tax 
increases.
  Clearly, I think all Americans expect that the increased trade 
resulting from GATT should be a sufficient stimulus to the economy 
which should more than make up for the cost of the lost revenues.
  I thank the Chair, and I yield the floor.
  The PRESIDENT pro tempore. The Senator from New Jersey, under the 
order entered previously, is recognized now to speak for up to 20 
minutes.
  Mr. BRADLEY. I thank the Chair.

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