[Congressional Record Volume 141, Number 61 (Monday, April 3, 1995)]
[House]
[Pages H4087-H4091]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
A DEBATE ON THE ISSUES OF TAXES
The SPEAKER pro tempore (Mr. Kingston). There being no designee of
the majority leader, under the Speaker's announced policy of January 4,
1995, the gentleman from Michigan [Mr. Bonior] is recognized for 60
minutes as the designee of the minority leader.
Mr. BONIOR. Mr. Speaker, I would like to engage my friends, the
gentleman from Michigan [Mr. Stupak] and the gentleman from California
[Mr. Miller], in debate about this whole issue of taxes, because I
think it is quite relevant. We are entering a very critical part of the
100 days.
I might say to my friends, the gentleman from California, the
gentleman from Michigan, to answer that question, this tax bill is so
weighted for those select few, the privileged few in our society, the
ones who are most comfortable, that it is an absolute outrage.
The gentleman from Michigan [Mr. Stupak] is absolutely right. The tax
bill we will be discussing and voting on this week gets rid of the
alternative minimum tax. What is that? I will tell you what that is.
That is the tax that corporations, you know, the Fortune 500, the
wealthiest corporations in the country, have to pay. The reason they
have to pay it is because in the early 1980's, from 1981 to 1985, you
had 130 out of the largest corporations in America pay no taxes for one
of those years. They were not paying taxes. So, you know, we
embarrassed them in this House to incorporate an alternative minimum,
which Ronald Reagan finally accepted after harassing him for about 3 or
4 years. Now that the Republicans are back in power, they want to get
rid of it.
In addition to that, the capital gains tax, and we are not opposed to
a tax for entrepreneurs and investors, we just want to see it equally
distributed. The proposal that the Republicans have on capital gains
would give 80 percent, close to 80 percent of the benefits to those
making over $100,000 a year or more.
Basically, Mr. Speaker, if you are making $20,000 or $30,000 or
$40,000 or $50,000 you will get maybe $25 or $26. If you are making
over $100,000 a year you get about $1,100. The higher you go up in
income, the more you are going to gain.
Of course, Mr. Speaker, the tax proposal in general is weighted
heavily. Over 50 percent of the benefits go to those making over
$100,000 a year. That is why we are opposed to it, that and the deficit
issue, but the inequity of it is so outrageous. I am not surprised that
it is weighted that way, because during this past week, we have seen
two glaring examples of how my friends on this side of the aisle, with
the exception of about a half a dozen of them who had the courage to
stand up for these proposals, the Republican Party has supported
proposals that would reward millionaires and in some instances
billionaires from paying their taxes, avoiding paying taxes if they
renounce their U.S. citizenship.
You say, ``Gosh, would anybody do that? Would anybody actually have
renounced their American citizenship?'' Yes, they would. You have got
about 12 to 24 people in this country who are playing that game. The
cost to the U.S. taxpayers is about $3.6 billion over a 10-year period,
giving up their citizenship in an unpatriotic way, after having had
this country defend them, defend their interests, defend their assets,
and throwing it away so they could avoid paying their responsible share
back to the people who worked for them, the men and women of this
country.
We had a proposal to get rid of that provision, to make them pay
their fair share. The people on this side of the aisle, with the
exception of five people, voted to retain it, to keep it, to protect
them. This was all in a bill that we passed here last Thursday, over
our objections, because of this provision. It was a good bill. It
provided a deduction for small business people under health care, 25
percent next year, 30 percent the following year. It could have been a
little higher if we had gotten rid of that billionaire provision. We
would have provided a little bit more for small business people.
Unbeknownst to us, Mr. Speaker, included in that bill, and not told
to us or anybody on this floor, was a secret provision that was made
known to the American public by the New York Daily News. It talked
about some back-room dealings cut by House Republicans. Last week the
House passed legislation that would allow tax deductions, as I said,
for self-employed, and repeal the tax benefits for minority
broadcasters.
However, hidden in that conference report was one special provision
that would allow Rupert Murdoch to reap tens of millions of dollars in
tax benefits.
Mr. Speaker, it is interesting, this 100 days
started with Rupert Murdoch when he gave the Speaker a $4.5 million
book deal. You know what, it is ending with Rupert Murdoch getting tens
of millions of dollars in tax benefits. What a shameful, shameful
story.
In fact, according to the Sunday's New York Daily News, ``Republicans
dropped their opposition to the tax break after learning Murdoch was
the beneficiary of the legislation, and consulting Gingrich, according
to six sources involved in the negotiations.''
In fact, according to an earlier New York Daily News story on
Saturday, a Senate staffer is reported as saying
[[Page H4088]] ``The Republicans were going to kill the deal until they
found out that Murdoch owned the station. Then they almost magically
approved it.''
Keep in mind, the Republicans claim they oppose this kind of tax
break. In fact, the Speaker said he was against it in February. The
gentleman from Texas [Mr. Archer] made a big deal about it when he
brought this bill up. He almost made a crusade about it in the
Committee on Ways and Means about killing these types of tax deals. But
we have 17 other pending deals that were on the block that they
scrapped, they got rid of. They refused to allow these deals to go
forward.
The only case, the only case involving Rupert Murdoch's TV station in
Atlanta was allowed to go through with a special tax break.
Mr. MILLER of California. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentleman from California.
Mr. MILLER of California. Mr. Speaker, that was the point the
gentleman just made. While there was a great deal of controversy in the
Committee on Ways and Means and on this floor about the fairness and
extent to which the Tax Code should be used to sell these
communications assets, it was clearly the intent of the Republicans to
get rid of all of them, and when amendments were offered to make them
fairer, to reduce the cost to the taxpayer, and to scrutinize them more
than they have in the past, that was rejected, because all of these had
to be killed.
Apparently when they got to conference committee, they went over an
inventory of the impact of this amendment, that this would have. They
found there were 17 or 18 or 19 deals that were in the works, that were
in stages of completion, and would benefit from this tax provision, the
sale of communications assets. They decided to kill them all until they
got to one, until they got to the one that represented Rupert Murdoch.
I think that is what is important to understand here. As the gentleman
pointed out, this 100 days started with Rupert Murdoch making a very
unusual gesture. That is, a book deal to the Speaker of the House that
originally was going to pay him a $4 million advance. The Speaker, to
his credit, later turned that down, after the light of day was shown on
that and people recognized the immediate conflict of interest.
The suggestion was that Mr. Murdoch really had no business of an
unusual nature before this Congress, that there was no conflict of
interest, and the Speaker had no ability to influence. Now we move
those statements forward 87 days, and what do we find out? That Mr.
Murdoch had specific legislation and matters before this Congress, it
was brought to the attention of the Speaker, and the Speaker opened the
gate for it to happen, because it was only through his willingness to
allow this to happen, and apparently some negotiations taking place in
the back room, that this one provision, 1 out of 17, was allowed to go
forward.
Mr. BONIOR. Mr. Speaker, not very many people knew about this. I did
not know about it. I do not think anybody on our side of the aisle knew
about it. It was done with the consent of two or three people on this
side of the aisle, including the Speaker.
I might also point out to my friend, the gentleman from California,
that the Speaker is beholden to Mr. Murdoch for the sale of his book.
He did not take an advance, so, you know, he is beholden based upon
royalties for the book. Mr. Rupert Murdoch, who is the owner of the
publishing company, can basically, depending upon how hard he pushes
for the sale of the book, determine how successful it will be.
The appearance of it is grotesque.
Mr. MILLER of California. It is not only the appearance now, today,
afterward. It is what was put forth to the Members of this House.
Members of this House thought they were voting on a good bill to allow
for the deductibility of 25 percent of the health costs for
individuals, for self-employed individuals, in this country, and yet
what do they find out? That that bill was now gamed by the Speaker, for
the interests of Mr. Murdoch, by the Senate, for the specific purposes
of providing camouflage, so under the cover, without anyone knowing
this, this provision could be written into law, and Mr. Murdoch could
gain apparently what is around $63 million of benefit.
The tragedy is that that $63 million now comes out of the very hide
of the deductibility, as you pointed out, between this and the
billionaires' tax break that was in that bill, which we did know about
and we did object to, and unfortunately, we could not get the
Republicans on the other side to agree to, these people maybe could be
allowed a deductibility of 30 percent of their health care costs, or 35
percent, for the billions of dollars that was put into this
legislation, all under the guise that we are doing something nice for
the self-employed, which everybody in the House agreed with. But they
gamed that with the secret deal here for Mr. Murdoch, and one clearly
has a very direct connection to the Speaker of the House of
Representatives.
Mr. BONIOR. Now they are asking us to take their confidences and
their word on a major, major tax bill that will benefit, as we said,
primarily the very wealthiest, the privileged few in our society. Why
would people want to do that, after having seen this last week two
glaring examples of greed for the wealthiest people in our society,
with the billionaire exemption, and now with this deal with Mr.
Murdoch?
Mr. MILLER of California. If I could just say, Mr. Speaker, every day
we start out the House of Representatives with the Pledge of
Allegiance. Members of this House and our guests in the gallery, they
pledge allegiance to the United States of America. They do not pledge
it until their taxes are too high, or until they want to save money.
They pledge allegiance to the United States of America through thick
and thin, through good and bad. They do not pledge it until their kid
does not get into college. They do not pledge allegiance to the United
States until their son or daughter gets drafted into the Army to fight
an unpopular war. They pledge allegiance to the United States day in
and day out.
Now we have a handful of billionaires that, for the sole purpose of
avoiding taxes, are willing to renounce their American citizenship, and
we are going to say ``Give them the congressional stamp of approval.''
It is absolutely outrageous that we would do that, considering the
other patriotic Americans that have lost their lives pledging
allegiance to the United States of America, that have lost their homes
pledging allegiance, that have lost their children in wars, that have
lost their spouses and their loved ones in wars in this country.
Now a handful of people decide that it is no longer to their
advantage to pledge allegiance to the United States. They are going to
leave the country for the sole purpose, this is the only way this can
happen, for the sole purposes of avoiding taxation on their estates. It
is an outrage.
Mr. BONIOR. It is an outrage, and it is an outrage that these two
provisions on this good bill that would help small business people all
over this country would be prostituted, prostituted by these two select
provisions in this bill, one of which we did not know about it, the
other of which we fought and we lost to the Republicans, that would
protect billionaires, that would protect Mr. Murdoch and his deals.
I yield to the gentleman from Michigan.
{time} 2000
Mr. STUPAK. It is only fair to our audience to let them know where we
are now. This bill has gone through both the House and Senate and the
conference reports, and we voted on it. It is now on its way to the
President.
And one of the things I have asked for tonight and I hope others
would join with me in urging the President to veto this whole bill, the
bill that is on its way to his desk to allow that tax break for the
self-employed individuals. We do not want to hurt that part of the
bill. We want to kill the $63 million deal that we see for Mr. Murdoch.
But the only way we can kill that whole situation is ask for the
President to veto that bill.
If he vetoes the bill, I would urge my support, I am sure the
Democratic leadership would do the same, to bring a bill to permanently
extend that self-insured business deduction expense for health care for
working Americans.
Mr. BONIOR. Would you yield on that point?
Mr. STUPAK. Yes, I would.
[[Page H4089]] Mr. BONIOR. If the President vetoes this bill, and I
hope he will--if he vetoes this bill we will do another bill here, and
we will do it quick because I know people on both sides of the aisle do
not want those small business people, those self-employed people, to go
without the 24 to 30 percent exemption for their health insurance.
And I would also predict to my friend from Michigan that the other
side will not even try to override that veto. They would not have the
guts, the nerve, the chutzpah to bring that bill back with those two
provisions and try to convince the American people that this is the
right policy for this country.
Mr. STUPAK. I would agree. I do not think there would be much
intestinal fortitude to try to allow a $63 million tax break for one
company, for the benefit of one individual. Who pays for that but all
of us, all the working men and women around this country.
But you know when we were talking a little bit earlier about the
alternative minimum tax. We are going to have a tax bill up this week
on the floor, and we are going to give tax breaks and tax breaks here
and tax breaks there, but one of the most repulsive tax breaks is the
repeal of the alternative minimum tax.
I know you started this special order tonight talking about that
alternative corporate minimum tax, and you are talking about, before
1985, before 1986 really when the bill was signed into law, how
corporations did not pay any taxes. And yet the person with the lunch
bucket or the secretary or the clerk or the midnight watchman has to
pay his Federal taxes. But corporations did not because they could
afford the accountants, the lawyers to find the tax loopholes, and they
would not have to pay any taxes.
You brought up, oh, about 130 companies that did not pay any taxes. I
guess one of the most striking ones was Du Pont Corporation. Between
1982 and 1985 their pretax profits were $3.8 billion--pretax profit,
$3.8 billion. You know how much they paid in taxes during those years?
Mr. BONIOR. How much?
Mr. STUPAK. Nothing. In fact, they supplemented their pretax profits
by obtaining $179 million in tax rebates, in tax rebates. I mean, $3.8
billion, you do not pay any taxes. We turn around through tax loopholes
and tax provisions, give Du Pont $179 million in tax rebates.
They want to bring back that kind of tax system because they say it
is good for American families when
the secretary, the clerk, or the watchman is paying Federal taxes, but
the corporation they work for that may have billions of dollars in
profits do not have to pay any taxes. In fact, they can get a tax
rebate.
So I know it is going to be a long week; it is going to have some
intense battles, but these are the inequities that we are trying to
correct to truly help the middle class. And I do not consider the
middle class Du Pont Corp. with $3.8 billion, or some of these other
large corporations that pay no taxes, yet the American people have to
pay a minimum 20 percent tax on their wages to the Federal Government.
Mr. BONIOR. There are a lot of good corporations in this country, and
they help in employment, they help the productivity of the county, they
help the country grow, but they also have an obligation as well to
participate in sharing in the burden of taxation so we can provide for
this country. And when they do not do it, when, for instance, we
subsidize the mining industry in this country with about a $1.2 billion
subsidy each year or the large irrigation industry in this country and
others with subsidies, I mean, it hurts everybody in the business
sector. It hurts large corporations, small people struggling in
business. And all we are asking is that everybody participate in making
sure that we have an equitable system.
And what we are getting out of the other side of the aisle, take it
out on school lunches, take it out on elderly heating assistance, take
it out on student loans. We are going to get a whole debate on student
loans coming up here because they want to add for us in Michigan here
the cost on the student loans will be about $4,000 additional for the
students in our State because they want to get rid of that interest
subsidy, move that right up to the front instead of 6 months after you
graduate. That is about a $4,000 hit.
They are taking all of these savings from middle-income people. They
put it in a little pot, and they move it over here, and they use it to
pay for these tax cuts for the wealthiest in our society. And oh, yeah,
they give some to middle-income people.
Let me give you an example what they give to middle-income people.
Capital gains tax cut. You earn about $50,000 a year. You get about $26
back on an average. You earn $200,000 a year, and you will get a cut of
about $11,266 under their tax plan. Where is the equity there?
Mr. STUPAK. You were talking a little bit about some of the things
that have happened on this floor. We were talking with welfare and
AFDC, aid for and to dependent children. Everyone gets all excited
about that, but yet we have this corporate welfare, too, where it is
aid for dependent corporations, AFDC as we call it in 1995.
And we do not mind helping out any corporations. And there are good
corporations out there. We do not mind helping them out. But if you
take this fiscal year and this tax year we are in, for every taxpayer
in this country, we are giving corporate welfare out at the amount of
$1,388 for every individual. You know what we give for heating, for
food stamps, for housing, for low-income folks?
Mr. BONIOR. How much?
Mr. STUPAK. $450 for each taxpayer. It is three times greater for
corporate welfare than it is for individuals.
And you mentioned student loans, which is part of this tax bill. The
student loans, my university, Northern Michigan University, University
of Northern Michigan, their tuition has gone up this year alone. It is
proposed to go up 15 percent. Where are they
going to get the money?
But yet we are going to let the corporations not pay any taxes. And
that money to help out with our direct student loan, the interest on
the loan, the Stafford grants----
Mr. BONIOR. Stafford loan, Perkins loan for the low interest, work-
study.
Mr. STUPAK. Work-study, you are right. Where is it going to go? To
help pay for this tax plan for the corporations.
Mr. MILLER of California. Would the gentleman yield?
Mr. BONIOR. Yes.
Mr. MILLER of California. I would like to say the gentleman from
Michigan [Mr. Stupak] makes a very important point. I think the people
in this country have got to begin to focus on where is the money coming
from to pay for this tax bill.
The money is coming from the people who need it the most in this
country. We saw that in terms of the nutrition programs, where $7
billion was taken out of nutrition for children, for the tax cut. We
saw $9 billion out of the interest subsidy that allows young people to
stay in school and not start paying interest on those loans until they
have the degree that allows them to get the job, almost $20 billion in
total out of student loans.
We also know that the money that they are talking about taking and
giving back to the seniors was money that is now supporting the
Medicare system. We know that there are additional cuts for Medicare.
This is one of the greatest transferences of wealth from middle-income
families, from working families, from families striving and sacrificing
before they ever take a student loan to pay for the education of their
children. To take money from these people and to transfer it to high-
income individuals, most of whom when you talk to them they say if that
is how it is done, then do not bother.
People making over $200,000, over $150,000, sure, they would like the
money. But they say if that is the price, is that kids are not going to
be able to go to school or not get a school lunch or these kinds of
programs, they say I do not need it, put it on the deficit, lower
interest rates, or leave it with the kids so they can get an education.
But what we see is all of this camouflage about middle-income people
when, in fact, we see that we had a whole group of companies that never
paid taxes up until 1988, and now they are going to relieve those
companies of the alternative minimum tax. They
[[Page H4090]] will go back to making billions of dollars and not
paying any taxes, not paying their fair share. They are going to give
capital gains to the highest-income people in the country, as you point
out, middle-income people with capital gains, a very slight amount.
The point is that is why they do not want the cap is that this is a
massive transfer from moneys that help people in this country achieve
advancement and status and education and training to participate in the
American economic system. And they are gathering up all of this money
and they are going to transfer it this next week into the tax bill to
go to high-income people.
Mr. BONIOR. And it is the same people that already have, are doing
well. I mean, one of the most telling statistics that I have seen this
year is the one that says, since 1979, 98 percent of the wealth and
income--income increases in this country have gone to the top 20
percent of in this country. That means 80 percent of the folks are not
going anywhere. They are standing still. They are losing ground.
Here we are, instead of trying to help those folks get into the game
and be a full participant in this society, we are giving more to the
top 20.
Mr. MILLER of California. Those are priorities. I mean, we have to,
we are not wealthy enough. We are going to offer an incentive program
for education, recognizing that families are struggling.
We heard testimony this last Friday out in San Francisco,
Congresswoman Eshoo and Congresswoman Pelosi and myself, about families
who were struggling far beyond the student loan debt. They have
refinanced their houses. They have done everything they can.
So we are going to offer--the minority leader, Mr. Gephardt, is going
to offer, allow them the deductibility of those education costs and
those training costs for people who are going back to school so they
can keep their jobs, allow them the deductibility on student loans,
allow them to set up an educational IRA so they can start saving if
they have very young children.
But we have enough money to do that, but we do not have enough money
to do that and then to give away money to people who essentially right
now do not need this kind of assistance because they are making very
high incomes, in the top 1, 2, 3 percent of all the people in the
country.
Mr. STUPAK. The other thing I think in this whole debate that is
somewhat lost is this money, this tax shift, that we are seeing money
go from the working class to the wealthier corporations and to
wealthier individuals in this country. It is going to them. It is not
going for deficit reduction. It is not going to reduce the National
debt.
We are going to shift over 5 years like $188 billion, and yet we have
a $176 billion deficit, $4.7 trillion debt.
Why are we running around giving tax breaks to the wealthiest people
and the wealthiest corporations while we are deficit spending? Wouldn't
the money be better served, couldn't we help out those corporations,
couldn't we help out those individuals if we would, of course, put the
money toward deficit reduction, which we could do more of?
You know, the logic is, is this the right time in this Nation's
history to be giving tax breaks when we are running a deficit? Where
are you going to get the money for the 188 other than taking it from
the working class? But wouldn't we really be doing our kids a bigger
favor if we brought down the deficit, the debt?
Mr. MILLER of California. The gentleman is quite correct. To borrow
money, to give a $500 credit to somebody making $150,000 to $200,000,
you ought to see what the children are going to have to make to pay
that money back over the next 25 years because we borrowed it from the
Treasury now.
If we were flush, if we had a big stack of money in front of us and
we had all of our bills paid, fine, then give a dividend to the
shareholders of America, give a dividend to the taxpayers, let them
participate.
But I assume when you go to your town hall meetings you are hearing
what I am hearing. People are saying how can you borrow money to give a
tax cut when you have the deficit? Pay down the deficit.
Because what do they remember? They remember after the President made
those cuts, those $500 billion, that interest rates went down. Their
children for the first time were able to buy a house. They were able to
refinance their houses from the high interest rates of the 1980's and
saw the economy moving.
What were they presented with this last week? The home sales again
are in the doldrums. The inventory is backing up. People cannot afford
to enter the home market again as first-time buyers. That would be the
benefit of the deficit reduction.
But they have chosen to provide, you know, hundreds of billions of
dollars that they simply cannot pay for in any other way rather than
just ravaging programs like student loans and child nutrition and a
whole host of programs that help families provide a better life for
their children, far in excess of the tax credit for the very wealthy.
{time} 2015
Mr. BONIOR. The tragedy in all of this, and if I could help bring it
to a close, and I will yield to my friend from Michigan before I do,
because I know my good friends from Texas are waiting, and I do not
want to keep them much longer, and my friend from New Jersey is waiting
as well.
You know, we started this conversation this evening when we talked
about the inequity in the tax bill, and we started off by saying this
hundred days was begun with Rupert Murdoch giving the Speaker a $4.5
million book deal, and it is really ending that way in the sense that
the President has on his desk right now a bill that will provide Mr.
Murdoch with tens of millions of dollars in tax breaks as a result of a
provision that was put into the conference report on the tax bill that
we have just had here in the House of Representatives that would have
benefited small businessmen and their health insurance concerns.
And, you know, I cannot tell you how totally frustrated I certainly
am, and millions of Americans, I think, join me in the frustration to
see my friends on this side of the aisle help the millionaires and, in
some instances, in this case, the billionaires reap these tax benefits
at the expense of everybody else, and then more disturbing is the way
it was done where no Members on this side of the aisle were aware of
it.
I hope the President will stand up and veto this bill.
Mr. President, if you are listening, if you veto this bill, you are
not going to have any trouble sustaining your veto in this House of
Representatives. The Republicans would not dare, after your veto, to
bring this bill back to the House floor with the billionaire provision
and the millionaire writeoff provision for Rupert Murdoch and expect
the American people to buy it.
It will have covered their 100 days in a way in which will bring
disrepute upon their efforts, and so with that, I would yield finally
to my friend, the gentleman from Michigan, to conclude, and I thank my
colleague, the gentleman from California [Mr. Miller], for his
eloquence and his support of working families.
Mr. STUPAK. I believe the gentleman from Michigan [Mr. Bonior] is
right. You know, it was H.R. 831. I think I said 381, but it is H.R.
831, which was to amend the IRS Code to permanently extend the
deduction for health insurance costs for self-employed individuals,
something we all wanted to do. In order to get this bill through and
get it passed by April 15, so people could take advantage of it,
because it had expired, so they could take advantage of it for the 1994
tax season, they put in a provision permitting this nonrecognition of
the capital gains to take care of the Viacom situation, again, all
honorable, all well-intended.
But what happens so often on this floor, then, they put in things we
do not know about, or they slipped something in. I was always proud to
say the House never did that, that we had very strict rules and
amendments and everything had to be germane to the bill before it. No
one got special treatment in the House. The Senate, at times, the other
body, may add a couple things here and there. We go to conference.
Those things are knocked out and taken care of. You know what got
knocked out on this one was the American people, and about $63 million
we have to pay for now.
[[Page H4091]] Mr. BONIOR. And 17 other minority broadcasters got
knocked out just to take care of Mr. Murdoch on the other end of the
deal.
Mr. STUPAK. So in summation, I hope the President does veto the bill.
I believe in the intent of the bill, but I certainly do not believe in
the final analysis of this bill and what we now know in less than 48
hours after it was passed that there was a special deal. So I hope the
President, if he is listening, as you indicated, would veto this bill,
bring it back. We will work hard to get it passed by the end of the
week.
____________________