[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4155-H4156]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            ON THE TAX BILL

  The SPEAKER pro tempore (Mr. Bilbray). Under a previous order of the 
House, the gentleman from Michigan [Mr. Smith] is recognized for 5 
minutes.
  Mr. SMITH of Michigan. Mr. Speaker, just to continue with those 
charts, the first chart, this is the tax cut for working-class 
families. For those families earning less than $25 thousand, there is 
100 percent tax cut. For those families earning less than $30,000, a 48 
percent tax cut. For those less than $45,000 a 21 percent tax cut.
  You see the tax cut continues to go way down. Those families with 
over a $200,000 income only have a 2-percent tax cut. So it must be 
tremendously frustrating for people to look at one side of the aisle 
and then the other side of the aisle as we go through these charts.
  But if you look at what is going to happen in terms of the tax day. 
You know, the tax day is how much of the year you have to work so that 
work and that effort goes to the Federal Government to pay taxes. 
Currently, it is June 4. Under the budget proposal that was submitted 
by this president, that tax day increases to June 7.
  Under this tax proposal that we are going to be considering for the 
next 2 
[[Page H4156]] days, it goes back to May 26 and, my colleagues, it even 
should be earlier than May 26.
  There has been suggestions that the tax breaks go to big business. 
With all due respect, I suggest to you, Mr. Speaker, that taxes placed 
on business are passed on in the price of their products. Right now 
between the regulations and the taxes that we charge business, they are 
paying every year $750 billion. That is twice the amount that you are 
paying on increased costs of the goods and services you buy compared to 
what you spend in your tax bill. It is bad enough, in the next couple 
weeks, as you sit down and figures out your tax bill of what you have 
to pay this Federal Government to operate its huge, overzealous, 
overbloated government, but just think for a minute the price, 
increased price that you pay for the products in this country because 
of the regulations that cost $500 billion a year to that business that 
they pass on to you in increased costs of their products, to the 
additional $250 billion that we change those businesses in taxes.
  If they are not successful in passing it onto you
   and I, the consumers of this country, then they go out of business. 
So I guarantee you, they price on that product.

  Let me show you what we are doing to business in this country on 
taxes. On the far-right column, you see in the United States we charge 
our business on our capital gains tax rate the marginal rate is 28 
percent. You compare that to France, it is 18 percent; Germany totally 
exempts their businesses; Japan is down to 20 percent; U.K. exempts the 
first 5,500 pounds and after that charges 40 percent.
  We are overtaxing our businesses. We are losing businesses that, No. 
1, go out of business; that, No. 2, decide to go to another country to 
operate. We cannot continue to place our businesses at a competitive 
disadvantage with what other countries in the world are doing.
  I request my colleagues to look at this tax bill of what is good for 
business and jobs.
  Mr. SAXTON. Mr. Speaker, will the gentleman yield?
  Mr. SMITH of Michigan. I yield to the gentleman from New Jersey.
  Mr. SAXTON. I just want to be recognized to ask the gentleman a 
question. And that is, as you pointed out, correctly, our capital gains 
tax rate is high. Mr. Schumer was just talking about the alternative 
minimum tax.
  When corporations or businesses are charged these taxes, how do they 
recoup the money that they have sent to the Government? Where do they 
get the money to send down here to Washington, DC for the politicians 
to spend?
  Mr. SMITH of Michigan. They increase their price of toys and 
toothbrushes and automobiles and everything else. The only thing that 
that business can do is pass on that cost.
  Mr. SAXTON. It is the consumer that ends up paying higher prices so 
businesses can pay taxes to send to Washington for the politicians to 
spend.
  Mr. SMITH of Michigan. Yes, and I think the important point is, we 
cannot place our businesses at a competitive disadvantage with other 
businesses in the world. We have got to encourage them to buy the 
equipment and machinery that is going to make their employees more 
efficient. If you put good tools in the hands of our workers, they are 
going to outproduce anybody on Earth. And we have got to have a tax 
system that encourages that action by business.
  Mr. KINGSTON. Mr. Speaker, will the gentleman yield?
  Mr. SMITH of Michigan. I yield to the gentleman from Georgia.
  Mr. KINGSTON. I was on the board of directors of a corporation before 
I came here. I know from talking to other business people that 
generally you decide how much profit you are going to make. Everything 
else is overhead, your payroll, taxes, everything else. I think you can 
successfully argue that corporations are not going to pay taxes 
regardless of what the rate is because it is a pass-through cost, just 
as the gentleman from New Jersey and you have said. It all goes back to 
the consumer so we are just playing games when we say it is 
corporations.
  Mr. SMITH of Michigan. It is a hidden tax.

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