[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Page H4109]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            TAX FAIRNESS ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 1995, the gentleman from Georgia [Mr. Norwood] is recognized 
during morning business for 5 minutes.
  Mr. NORWOOD. Mr. Speaker, I suppose it would be in order for me to 
say briefly, about the speech you heard 10 minutes ago about OSHA, that 
all of those horror stories that you heard were true. Having practiced 
dentistry for 25 years, I was one of the people under the gun when I 
would try to give back my children their baby teeth, and that is, in 
fact, a true story.
  It is also additionally nice to hear the people on the other side of 
the aisle be for the tax deduction for business people, for self-
employed people for their health care insurance, but it does make one 
wonder whey we did not pass that last year when they were in charge of 
Congress.
  But, Mr. Speaker, I rise today in support of the Tax Fairness Act 
because it will benefit average, hard-working Americans. I am 
particularly in support of the capital gains tax cut because when you 
strip away the rhetoric, reducing the capital gains tax is simply a 
good idea.
  Mr. Speaker, when we move beyond the nonsensical class-warfare 
arguments against cutting the capital gains tax, the economic reality 
is clear. All Americans will benefit from cutting the capital gains 
tax. It will encourage investment and create jobs.
  The capital gains tax penalizes investment and risk taking. Investors 
are discouraged from investing in startup ventures because they might 
actually make money. In turn, this makes it more difficult for 
entrepenuers trying to start a business to find investors. If they 
cannot start a business, they cannot create jobs. By penalizing 
successful investments through the capital gains tax, the Federal 
Government costs the economy jobs.
  The Democrats will argue that cutting the capital gains tax is only a 
tax break for the rich. Of course, that is simply not true. If you own 
an asset like a house or a farm or a small business or any stocks or 
bonds, you will be subject to the capital gains tax if you sell that 
asset for more than you paid for it. Millions of Americans own assets 
that are subject to the capital gains tax, and that is why 70 percent 
of the people who will benefit from a cut in the capital gains tax will 
have incomes of less than $50,000. Maybe the Democrats think that is a 
tax break for the rich, but I call that commonsense help for hard-
working Americans.
  Mr. Speaker, the current high capital gains tax rate has been an 
utter failure as a tax policy. The economic forecasts the Democrats 
cite in attacking the capital gains tax cut have been thoroughly 
discredited by history. When Ronald Reagan cut the capital gains rate 
in the early 1980's, the amount collected from capital gains taxes 
soared. When the tax rate was raised in 1986, the revenues collected 
from capital gains taxes dropped like a rock. That the CBO's forecast 
for 1987 and beyond missed by a mile speaks volumes about the 
misconceptions that surround capital gains. Like the Democrats, the CBO 
believed that you could raise revenue by raising the capital gains tax. 
In reality, potential investors worked so hard to avoid the tax 
increase that revenues fell. The CBO's error in predicting capital 
gains tax revenue cost the Treasury $170 billion. Annual capital gains 
tax collections have been declining rapidly since 1986. The current 
capital gains tax rate is just not good economic policy.
  Mr. Speaker, a good friend of mine named Bartow Morgan encouraged me 
long and hard to support the capital gains tax cut. He knew how much 
the capital gains tax hurt the economy and the potential investments 
that were suppressed by the capital gains tax. That Bartow Morgan did 
not live to see us cut the capital gains tax is terribly disappointing 
to me. Mr. Speaker, when we pass the Tax Fairness Act Thursday, I for 
one will be thinking of people like Bartow Morgan, who believed that 
cutting the capital gains tax would help all Americans, and never 
allowed themselves to be swayed by the class warfare that we so often 
hear from the Democrats. Mr. Speaker, cutting the capital gains tax is 
the right thing to do for all Americans and I strongly urge my 
colleagues to remember that when we vote on Thursday.


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