[Congressional Record Volume 141, Number 46 (Monday, March 13, 1995)]
[Senate]
[Pages S3841-S3842]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          TAX CUTS IN MICHIGAN

  Mr. ABRAHAM. Mr. President, I rise today to congratulate John Engler, 
Governor of my State of Michigan, for signing into law last week his 
12th, 13th, 14th, and 15th tax cuts since taking office.
  Governor Engler has increased the personal exemption in our State to 
at least $2,400, saving Michigan taxpayers $69 million on their income 
taxes in fiscal year 1995. The exemption also will be indexed for 
inflation starting in 1998.
  He has created a new refundable income tax credit for college tuition 
that will help individuals and families struggling to get an education.
  He has reduced the single business tax by removing unemployment and 
workers' compensation funds and Social Security payments from the tax 
base.
  He has begun phasing out Michigan's intangibles tax, raising the 
filing threshold and providing for its total repeal, effective January 
1, 1998.
  Mr. President, 70 percent of these tax cuts will benefit individuals, 
with 30 percent benefiting the State's job creators. Taken together 
with the other 11 tax cuts he already has implemented, these cuts will 
save Michigan taxpayers $1.2 billion this year alone.
  We here in Congress would do well to look at Governor Engler's 
performance in setting out our program of fiscal reform from the 
Nation. When he took over as Governor in 1991, John Engler inherited a 
$1.8 billion deficit. That means that in 1991 Michigan was running a 
deficit that equaled 10 percent of its total State spending--almost as 
large a deficit in proportion to total spending as the one run here in 
Washington.
  Governor Engler had a tough choice to make. He could maintain 
Michigan's current spending levels and increase taxes, or cut spending 
and hold the line on taxes. But he decided to choose neither course of 
action, instead boldly cutting both spending and taxes.
  And the results have been remarkable. Through aggressive use of his 
line-item veto he brought about an 11-percent cut in real, after-
inflation spending. In addition, he made Michigan our Nation's top 
State in creating manufacturing jobs, more than 40,000 in the last year 
alone, second in the Nation in personal income growth, and a leader in 
lowering unemployment rates. All this while increasing State funding to 
educate Michigan's children.
  Mr. President, Michigan can serve as an example to the Nation of how 
aggressive budget and tax cutting can go together to spur economic 
growth and better the lives of our citizens.
  We too can get our spending under control, without cutting essential 
programs; we need only the courage to put in place and utilized the 
tools Governor Engler and the Michigan State Legislature used to bring 
their State back from the brink of economic disaster.
  Michigan's constitution required a balanced budget; it also provides 
the Governor with a line-item veto. Both of these tools were essential 
to Governor Engler's efforts to bring spending under control.
  We have the power to do for America what Governor Engler and his 
partners in the State legislature have done for Michigan, if we are 
willing to enact a line-item veto and add a balanced budget amendment 
to our Constitution. These tools will help us order our priorities and 
discipline our spending.
  Most important, we must recognize that by taxing the American people 
[[Page S3842]] less we can help our economy and our budget more. This 
week the House Ways and Means Committee will report a tax reduction 
bill that creates a $500-per-child tax credit for families and cuts the 
capital gains tax in half. In all likelihood, the House will approve 
these important tax reductions.
  Some of our colleagues here in the Senate have suggested that we 
abandon tax cuts--and focus exclusively on reducing the budget deficit. 
Having lost the vote on the balanced budget amendment, I can understand 
their desire to put spending cuts first in order to produce a balanced 
budget plan.
  But as Governor Engler has demonstrated, cutting spending and taxes 
is the best way to reduce the deficit and encourage economic growth. We 
must have confidence that the American people, if allowed to keep their 
own money and spend it as they choose, will fuel the engine that runs 
our economy, producing more jobs, greater prosperity, and a balanced 
budget.
  Mr. President, I yield the floor. I also suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Mr. Thompson). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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