[Congressional Record Volume 141, Number 9 (Tuesday, January 17, 1995)]
[Extensions of Remarks]
[Page E101]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E101]]
          INTRODUCTION OF THE CITIZENS' TAX RELIEF ACT OF 1995

                                 ______


                          HON. MAJOR R. OWENS

                              of new york

                    in the house of representatives

                        Tuesday, January 17, 1995
  Mr. OWENS. Mr. Speaker, most Americans seem to agree that a tax cut 
is desirable, since they have become anxious while watching the 
Nation's economy plunge deeper into global interdependence. But 
Congress must be responsible enough to rein in the deficit 
simultaneously so that Americans do not end up paying higher taxes in 
the future. My proposal, the Citizens' Tax Relief Act of 1995, would 
successfully accomplish this delicate balancing act.
  The 1990 Budget Enforcement Act--1990 act--requires that any cuts in 
taxes must be paid for with equal cuts in mandatory spending--
entitlement programs such as Medicare and Social Security--or with 
increases in other taxes, not with cuts in discretionary spending. This 
pay-as-you-go rule has been invaluable in beginning to get a handle on 
the Nation's deficit.
  Unfortunately, Democrats and Republicans alike appear ready to cast 
aside this proven tool of fiscal responsibility. Members on both sides 
of the aisle are toying with the idea of lowering the 5-year budget 
caps on discretionary spending, thereby forcing the appropriations 
committees to spend less. But according to the Congressional Budget 
Office [CBO], lowering the caps in a budget-reconciliation bill to pay 
for a tax cut is purely speculative. It is no different than what 
Republicans have been accusing Democrats of for years--spending first 
while promising to pay later.
  Another option being considered is amending the 1990 act to break 
down the walls between mandatory and discretionary spending. Since this 
move would buy Members of Congress time in making difficult choices 
about cuts in entitlement programs, the result would likely be a 
deficit which continues to balloon.
  For the reasons I have outlined, Congress must not take the easy way 
out. Instead, we must at least match proposed tax cuts with entitlement 
cuts or increases in other, more targeted taxes. The Citizens' Tax 
Relief Act of 1995 would do just that.
  This bill would lower the first income tax bracket from 15 to 12.5 
percent, giving every American a tax cut. To pay for it, a huge tax 
loophole would be eliminated--the favorable tax treatment of inherited 
property. To be equitable, the bill also would exempt from taxes the 
first $250,000 of capital gains on the sale of inherited homes--which 
is currently available only to individuals over the age of 55 and only 
for the first $125,000--and provide lower capital gains tax rates on 
the inherited property of heirs who pay the tax in the first 4 years 
after enactment of the bill.
  Currently, when a person dies and leaves property to a family member, 
the amount by which that property increased in value during the 
person's lifetime is never taxed. Such a policy is fundamentally unfair 
considering that if the same person sells the property before dying, 
the individual is taxed on the gain. My bill would reverse that policy.
  A study conducted by two Cornell University professors showed that 
more than 10 trillion dollars' worth of property will be inherited over 
the next 45 years. That means that there will be several trillion 
dollars of capital gains that should be taxed. If Congress takes 
advantage of this opportunity, we would have more than enough money to 
pay for my proposed tax cut, so that the bill actually would increase 
the revenues of the Federal Government. With the money left over, we 
could invest in job creation programs.
  Mr. Speaker, I urge all of my colleagues to support this bill in 
order to achieve the three goals of increasing Americans' disposable 
income, creating jobs for everyone who is willing and able to work, and 
getting the Nation's fiscal house in order.


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