[Congressional Record Volume 141, Number 61 (Monday, April 3, 1995)]
[House]
[Pages H4081-H4082]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


               REDUCING TAXES: THIS IS THE WEEK THAT WAS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. Smith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, after we finished this week, a 
lot of people are going to be saying, ``This is the week that was.'' 
This is the week that we are talking about reducing taxes.
  You know, a year and a half ago this body increased taxes over the 5 
years of the budget by $25 billion. Economists have come to our budget 
committee and said tax increases are a depressant on economic growth 
and job growth.
  So some of us thought that it would be good in the Contract With 
America to take away some of those giant tax increases from a year and 
a half ago. So the question was: How do we reduce some of those taxes 
in a way that is going to encourage economic growth, job growth in this 
country?
  Well, I was looking at one bill that was concerned about what the 
United States was doing to encourage savings and investment as opposed 
to other countries of the world. Mr. Speaker, that is what this chart 
shows. I am not sure that everybody can see the chart, but let me just 
briefly go through the chart that shows that, compared to the other G-7 
countries, the industrialized nations of this world, the United States 
ranks dead last in savings, we rank last in our investment in new 
machinery and equipment per worker, and, not surprisingly, we rank last 
in the increase of productivity.
  So if we go to all of the economic thought that is prevailing now of 
what should be done to increase jobs, the suggestion is that we 
encourage savings and we encourage investment in that new machinery and 
equipment, that when it is put into the hands of those workers, it 
makes those workers more efficient, more productive, and ultimately 
increases our competitive position with the world.
  That is why I introduced the bill, Neutral Cost Recovery, 2 years 
ago, to deal with the unfairness of the way our tax code treats those 
businesses that buy that machinery and equipment.
  The legislation coming out in the tax bill that we are going to be 
considering for the next 3 days does essentially three things: It 
increases expensing. In other words, that amount of investment in 
capital machinery and equipment and facilities that is allowed to be 
deducted as an expense, as a business expense in the year of purchase, 
that is increased to $35,000.
  No. 2, that the remaining amount of that capital investment that is 
put on the depreciation schedule will be indexed for inflation and the 
time value of money. In other words, right now our Tax Code requires 
that you spread out toward the useful life of that property, 3, 5, 10, 
15 years, that you spread out that deduction in what is called the 
depreciation schedule.
  Neutral Cost Recovery indexes what you are otherwise allowed to 
depreciate for inflation.
  The third element is something that has been very unfair to the 
businesses in this country; that is the alternative minimum tax.
  So what we do to a business, when they figure up their tax and they 
have not made money that year, we again 
[[Page H4082]] say, ``Well, we are going to penalize you anyway by 
making you recompute your depreciation schedule so it results in a 
lesser deduction.''
  So, AMP is also modified in this bill. It seems if we are concerned 
with increasing jobs in this country and if we are concerned with 
raising taxes on the American people, that it is appropriate we have 
the discussion this week. The $189 billion over the 5 years of the 
budget that we are reducing taxes is small in comparison to the $250 
billion that were increased, raised on the working men and women and 
retirees and businesses 3 years ago by this Chamber.
  So, Mr. Speaker, I hope everyone will tune into the discussion and 
decide whether or not it is going to help this country, whether it is 
going to allow hardworking Americans to keep some of their own money in 
their own pockets rather than give it to the Federal Government to 
spend, as we discuss, and ultimately pass this tax reduction bill this 
week.


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