[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4154-H4155]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         ALTERNATIVE MINIMUM TAX REPEAL PART OF GROWTH PACKAGE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Saxton] is recognized for 5 minutes.
  Mr. SAXTON. Mr. Speaker, the gentleman from New York [Mr. Schumer], 
my good friend, and I work about as well together as a Democrat and a 
Republican who come from different ends of the political spectrum can 
work.
  I would just like to say to the gentleman that I appreciate the 
things that he just said about the alternative minimum tax and the 
companies that he referred to. He mentioned that they do not have 
children and I guess that is true, but I will tell you what. They have 
a lot of workers. Mobil has a lot of workers and Ford has a lot of 
workers and Chrysler has a lot of workers. I cannot really read the 
whole list. I am sure all those big companies have a lot of workers 
that depend on them.
  One of the things that my friend from New York did not say is that 
what the alternative minimum tax repeal does is to make it easier for 
these companies to do business. Studies show conclusively that 42 cents 
out of every dollar that we give back to a corporation in taxes goes 
directly to the workers in salaries, more workers, and higher salaries. 
So the repeal of the alternative minimum tax is not such a bad way to 
go to make things better for everybody.
  As a matter of fact, that is what the Republican tax package is 
about: To make things better for everybody. It is patterned, believe it 
or not, after something John Kennedy said years ago when he said, ``A 
rising tide lifts all boats.'' It is true. This is a growth-oriented 
tax package and the alternative minimum tax provision is part of that 
growth package.
  Mrs. SMITH of Washington. Would the gentleman from New Jersey [Mr. 
Saxton] yield?
  Mr. SAXTON. I will yield to my colleague, the gentlewoman from 
Washington [Mrs. Smith].
  Mrs. SMITH of Washington. I want to ask you a question, but I want to 
say something first. I remember why I got into politics. I just was 
sitting here thinking they doubled my taxes in one year on my small 
business. Had more than 125 people. They doubled them.
  And in our State we have a business and occupation tax. That means 
you can have no profit like these companies, and the government still 
taxes you. So you can end up with a net nothing, and the government 
gets theirs. They skim off the top always, just like the minimum tax. 
Always, always.
  In the early 1980's, I was losing money. At the same time, we had 
this business and occupation tax, which was a gross tax. It was gross 
in many ways. I laid off two people. I got mad. Folks, I was a 
Democrat, 30-some-year Democrat, adamant Democrat.
  I got a book on how to campaign. The guy was a Democrat that had 
voted for the taxes raised, and I defeated him, too, and I think about 
that.
  You have to stop thinking that every time you turn around it is 
better to tax. Because I lost two jobs, and I think, ``Isn't that what 
we are talking about, job creation in most of this? Don't most 
dividends that you get from stocks, I think I pay tax on all the 
dividends I get from stock, isn't that tax, too? Aren't they getting 
their tax out of these corporations?''
  Mr. SAXTON. Well, it is tax.
  I would say to the gentlewoman when I was chairman of the working 
group that put the growth part of our tax package together during the 
summer of last year
 and we identified a number of issues that we thought needed to be 
changed and had broad agreement, for example, the capital gains tax, 
which 
[[Page H4155]] was increased in 1986 from 20 to 28 percent, statistics 
show again, conclusively, that not only did it not raise the money that 
CBO said it would raise, but it acted as a wet blanket on the expansion 
of business. And that is what caught up with us beginning in 1988.
  One of the red herrings that is brought by our friends on the 
Democrat side is that the rich get all the breaks from the capital 
gains. As the gentlewoman knows, who prepared taxes for people and 
businesses for years, and as this chart shows, 38.4 percent of the 
distribution of capital gains realizations, 38 percent of the money 
from capital gains comes from people under $50,000. So 38 percent of 
the tax break comes for people who make less than $50,000. That is the 
biggest single group of people who will benefit from the capital gains 
tax cut.
  Of course, 22.4 percent make between 50 and 100. When you get to 
$100,000 to $200,000, which I consider a pretty good salary, it is only 
13.8 percent of the people who pay capital gains there and 25,4 percent 
who make over $200,000.
  So by far and away the benefits here are for people who are in the 
modest income category.
  This is another issue here on this chart that has been, I think, 
mischaracterized by the other side of the aisle, the distribution of 
the $500 per child tax credit. We had this chart up here a few minutes 
ago when somebody else was speaking, and it shows clearly that 87.5 
percent of the people who will benefit from this, the families earn 
less than $75,000 a year.

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