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




                          MIDDLE-CLASS TAX CUT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Massachusetts [Mr. Olver] is recognized for 5 minutes.
  Mr. OLVER. Mr. Speaker, I think that the discussion here that has 
been going on really is most appropriate because tomorrow we are going 
to be talking about the beginning of the debate on the middle-class tax 
cut.
  We have all heard a great deal about the middle-class tax cut over 
the last couple of years, and the reason why we have been talking about 
a middle-class tax cut is that the middle class really is very anxious.
  Jobs have been insecure for a number of years, for quite a few years. 
The cost of health care in the last 15 years has gone up by an enormous 
amount. The cost of educating your college-age kids has gone up 
tremendously, much faster than inflation.
  In sum total, I think it can be summarized in this chart, which shows 
what has happened over the last 15 years or thereabouts, or at least 
the 15 years from 1979 to 1993 when for different parts of the 
electorate, different parts of the citizenry and the
 electorate, of course, the rate at which people's income has gone up 
has been very different from the rate at which inflation has gone up.

  People's income, for people who are relatively low- and middle-income 
folks down here at the left side of the chart, has actually been going 
up slower than inflation for that 15 years, and so the broad middle 
class in here has seen their incomes erode for a long period of time. 
The very high-income people in the top 20 percent, these rightmost two 
bars representing the top 10 and the next 10 percent of all people's 
incomes in this country, they have seen their incomes in that 15 years 
go up considerably faster than inflation and have done pretty well in 
that period of time.
  So we have heard, theretofore, a great deal about a middle-class tax 
cut in order to give people down in this region, which the middle of 
the American citizenry falls right in this region, who have lost a 
little bit in the last 15 years certainly, and those who are in the 
lower middle class and those who are low-income working people and down 
there have all seen their incomes go down, and so indeed they should be 
very anxious.
  Well, so what do we have now coming up? We are going to be starting 
debate on a $190 billion tax bill. By the way, there is not a single 
economist who came before the Committee on the Budget in all of our 
hearings yet this year who suggested that we should be giving a tax cut 
of this sort when we are running the kinds of deficits, when we are 
running 200----
  Mr. KINGSTON. Would the gentleman yield?
  Mr. OLVER. No, I do not have time to yield.
  Mr. KINGSTON. I will give you a minute of my time when it is my turn.
  Mr. OLVER. Fine. I will yield if you would take less than a minute so 
I will not lose any of my time.
  Mr. KINGSTON. We will time it.
  I have a chart here. I do not know if you have seen it, but what this 
one shows clearly is that a lower tax rate actually increases revenue 
to the Federal budget and also that the economic----
  Mr. OLVER. Lower tax break.
  Mr. KINGSTON. A lower tax rate increases revenue to the Federal 
budget.
  Mr. OLVER. If I may reclaim my time, I think that I am not sure 
exactly where that chart is from. It is hard for me to see it, but we 
tried that economics. It was called voodoo economics by the gentleman 
who was later the President of the United States and who had served as 
Vice President under President Reagan.
  Mr. KINGSTON. Was that John F. Kennedy? I see that this goes back to 
1960.
  Mr. OLVER. Mr. Speaker, is this my time or not my time?
  The SPEAKER pro tempore. The gentleman from Massachusetts has the 
time.
                              {time}  1830

  Mr. Speaker, the idea that you can increase revenues was very 
thoroughly debunked in the 1980's, when tax reductions were given and 
when the deficits went right through the ceiling during that period. 
And during a 12-year period we saw more than a quadrupling of our 
national debt, with deficits year after year that ran between $200 and 
$350 billion per year, that economically have brought us to the sorry 
state that we are presently in.
  But in any case, no economists agree that we should be doing this 
kind of tax break.
  Now, let us look at the tax break that is going to be given, though, 
given that we might want to do something for people in this lower area, 
this left hand area who are middle-class people and whose incomes have 
been going down hill in the last few years.
  I am going to show a second chart here which shows where the actual 
tax benefits under the contract that we are going to be starting to 
debate tomorrow will fall. This is a little different from the chart 
that some others of my colleagues have been showing because it is 
trying to show what happens while we are in the phase-in period in the 
next 5 years, rather than the out years.
  During that phase-in period, more than 50 percent of all the tax 
break would go to the highest income, two groups here, and those are 
exactly, of course, the people who fall in these two categories out 
here who have done the best during the 1980's. More than 50 percent of 
all the tax break occurs there.

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