[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4148-H4149]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                DISTORTIONS ABOUT THE TAX REDUCTION BILL

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Doolittle) is recognized for 5 minutes.
  Mr. DOOLITTLE. Mr. Speaker, many of us are looking forward with 
greater anticipation tomorrow to passing what is a most significant 
provision of the Contract With America. That is the tax bill with all 
of the attendant benefits for families throughout the United States.
  We have heard much talk from the other side about benefiting the 
rich, gross distortions of what this bill actually does, and a constant 
reference to the rich or to really utilizing a technique, if you will, 
of class warfare.
  Mr. Speaker, I just would like to point out the Constitution of the 
United States and the writings of the Founders of this great country 
make no mention of class or income level. Indeed, the Declaration of 
Independence proclaims that all men are created equal, which means that 
all men and women stand equal before God in their entitlement to 
exercise their inalienable or God-given rights of life, liberty, and 
the pursuit of happiness.
  We all know that the American family is overtaxed today. In fact, 
Americans are overtaxed, paying a higher percentage today in taxes than 
at any time since World War II, and we are not in a war right now, Mr. 
Speaker. We are fighting for survival against the Government which 
seeks to regulate and tax out of existence the very Americans who 
provide for its support.
  Now, we hear from many critics on the other side the idea that we 
ought to sacrifice in essence for Government so that Government can tax 
the people's money, bring it back here to Washington, run it through 
the bureaucracy and trickle it back down again out to the end 
recipient.
  Study after study shows that we lose between half and two-thirds of 
every tax dollar that is taken in that fashion. That is a gross waste 
of resources and a burden on Americans that we can no longer afford. We 
are making a start to turn that around with this very important piece 
of tax legislation tomorrow which cuts taxes for everyone.
  I would just like to reference a chart that shows the effect, for 
example, of the capital gains tax cut where we are constantly 
criticized for benefiting the rich, and I would just like to reference 
this chart prepared by the Bureau of National Affairs which indicates 
that the distribution of tax returns reporting a capital gain with 
income measured as the adjusted gross income minus the capital gains, 
and you can clearly see that 70 percent of the returns filed claiming 
capital gains are for people whose incomes, adjusted gross incomes, are 
under $50,000, 70 percent. For those with adjusted gross incomes of 
over $200,000, only 2 percent filed such returns.
  So do we all benefit from these capital gains provisions? Yes, we do. 
And by the way, the distribution of the benefits for the $500-a-child 
tax credit is roughly in similar proportion to what we see here with 
the capital gains.
  Again, the vast bulk of the benefits go to people of middle incomes. 
But again we are changing the tax provisions to say children have value 
and whether you are rich or poor, we as a government are going to 
recognize that with a $500 per child tax credit. It is right in the 
philosophy of a man who as a good Democrat, President John F. Kennedy, 
who proclaimed ``A rising tide lifts all boats.'' That is the 
philosophy of the Contract With America. We believe in restoring 
competitiveness to our economy. We believe in increasing the rate of 
economic growth. We believe in increasing the savings rate of 
individuals, and we do that in this tax 
[[Page H4149]] bill by changing the provisions relative to IRA's, 
individual retirement accounts, so that all people have an incentive to 
put some money away for a rainy day and when they do that, after 5 
years, they can take it out tax-free.
  That will create the incentive that Americans need to begin saving 
once again. The whole basis of this country, the free enterprise 
system, is based on incentive.
  In the Contract With America we restore that incentive.
  I look forward to that very important bill tomorrow.
  

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