[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Page H4110]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         ALTERNATIVE TAX PLANS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 1995, the gentleman from Pennsylvania [Mr. Gekas] is 
recognized during morning business for 5 minutes.
  Mr. GEKAS. Mr. Speaker, to cut or not to cut, that is the taxing 
question. Whether it be nobler in the minds of the people who attack 
the Republican plan to sling an arrow into death, that remains for the 
Democrat opposition or all those who favor deficit reduction as against 
tax reduction.
  But let me record a little history for the Congressional Record. When 
the President was running for the Presidency, Bill Clinton's message 
included a tax cut for the middle class, which, of course, he never was 
able to implement or refused to implement or reneged on the promise to 
implement.
  And so somewhere in 1993 and 1994, when we saw that the 
administration was going really the other way, not a tax cut for the 
middle class but a tax increase for most Americans, when that began to 
happen and we saw some signs of weakening in the economy, many of us 
thought that this would be ripe for a time for a tax cut cast in the 
image that we wanted to present.
  So I myself prepared then in 1993 and 1994 a tax package, a tax cut 
package. It included reducing the payroll tax by 1 percent both for the 
employer and for the employee. This would spur savings, bring down the 
tax burden on the middle-class Americans, the working Americans.

                              {time}  1000

  I couple that proposition with a capital gains reform.
  Now, there was method in my madness. Research, just as some of the 
speakers have already alluded to, has indicated that a reduction of the 
capital gains rates spurs millions of transactions to occur almost 
overnight and produces revenues, stimulates transactions and produces 
tax revenue. So, in a whirlwind of action, in my plan the capital gains 
reform would pay for the reduction of the payroll taxes of working 
Americans.
  I thought it was a good plan, but I was not satisfied, Mr. Speaker, 
to just take my own judgment on it. I submitted the plan to the 
Institute for Research on the Economics of Taxation, a well-known and 
renowned and dependable think tank here in the Washington area whose 
sole reason for existence is to analyze methods of taxation and various 
plans.
  When they received my plan, they reviewed it; and I received a 
commendatory letter. I must say it made my ego feel good about it that 
the plan was workable, and it emphasized that capital gains reform, 
coupled with my plan of reducing the payroll tax, would not only save 
money for the working family but spur investment and savings, both of 
which are vital to a good economy. So I felt pretty good about it.
  Now, that brings us to the present. Since that time, many other plans 
have been presented. The President did come up after the election in 
1994 with a tax reduction plan. So did the minority leader, the 
gentleman from Missouri. So did other members of the minority. So did 
other members of the Republican Party. But the main thrust of the 
Republican provision was contained in the Contract With America.
  So I say here today that although I had a good idea and one that I 
will still pursue in months to come about reducing the payroll tax to 
stimulate the working American families, we have before us now a good 
alternative, the Contract With America provision that we will be 
supporting and voting for this week.
  Why am I going to support it? And I plan to do so. Because it is part 
of the Contract With America. Because it does reduce the tax burden of 
middle-class families. Because it does stimulate savings. Because it 
will provide for the ability of families to work out their own 
destinies in how they want to spend their money for their families and 
will go a long way toward spurring the same kinds of results that we 
submitted to the think tank about economics of taxation.
  Why? Because it will be coupled with capital gains reform. So the 
best of all worlds will have occurred as far as this Member is 
concerned. I will be voting for the Contract With America provisions 
because of capital gains reform, already approved by the people to whom 
I submitted my plan, and a middle-class tax cut, also approved in our 
plan.


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