[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Page H4157]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                       DISCUSSION OF THE TAX BILL

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio [Mr. Hoke] is recognized for 5 minutes.
  Mr. HOKE. The question that I wanted to ask the gentleman was if he 
was aware that 39.2 percent of all Federal income tax paid is paid for 
by only 3.3 percent of the taxpayers, the top 3.3 percent of taxpayers 
pay 40 percent of the taxes?
  That being the case, the numbers that you quote there, they are, you 
know, made to appear, and I do not know if the numbers are right on the 
floor. You know on the floor we see all kinds of stuff and people make 
averments that God only knows if they are true or not, but I will 
assume your chart is correct.
  It only stands to reason that the people making more money are going 
to get more dollars back when you consider the fact that you have got 
3.3 percent of all returns, all individuals paying income tax paying 40 
percent of the taxes. This is the way, this is the way our system 
works.
  The problem is that we do not have enough people at the top, if you 
tax them completely, if you leave them with just a, you know, a minimum 
wage, it still does not solve our deficit problem.
  What has happened is that we have year after year after year 
continually eroded to a greater extent the amount of money that is 
being paid by middle-class working American men and women. That is the 
problem we have in our tax system.
  Mr. SKAGGS. Mr. Speaker, will the gentleman yield?
  Mr. HOKE. I yield to the gentleman from Colorado.

                              {time}  1845

  Mr. SKAGGS. I think the gentleman's point begs the question. One, are 
we doing deficit reduction? We are not. The tax bill, as the gentleman 
knows, is going to bust the deficit.
  Mr. HOKE. Mr. Speaker, reclaiming my time, I want to recognize the 
gentleman from Massachusetts [Mr. Olver], who my good friend from 
Georgia [Mr. Kingston], borrowed a minute from, and I want to give him 
back his minute, if he will take it quickly.
  If not, I yield to the gentleman from Georgia [Mr. Kingston] while 
the gentleman from Massachusetts is moving to the microphone.
  Mr. KINGSTON. Mr. Speaker, it is important for us to realize that 
lower taxes, specifically lower capital gains taxes, increase revenue, 
and that does not come from the Republican Party, it comes from the 
Congressional Budget Office. A young fellow named Steve Robinson and I 
spent the whole day tracking this.
  This chart is busy, and it is very difficult to see it, but generally 
what it shows is, remember back in high school sines and cosines and 
that go like this: Basically when the tax revenue is high, the capital 
gains tax is high, and let's say the capital gains tax is low, it goes 
like a wave, then the tax revenues are the same thing.
  At a high tax rate, the revenues are low. At a low tax rate, the 
revenues are high. It goes like that. There is an absolute relationship 
between the two. It is not voodoo economics. This actually goes back 
to----
  Mr. HOKE. What you are saying is there is a direct correlation 
between raising rates and lowering revenue, lowering rates and raising 
revenue?
  Mr. KINGSTON. That is exactly right. That is the point I was trying 
to make.
  Mr. HOKE. Mr. Speaker, I yield to the gentleman from Massachusetts 
[Mr. Olver].
  Mr. OLVER. Mr. Speaker, I thank the gentleman for yielding to me.
  I'm not sure how many economists or how many economics books would 
agree that there is a direct proportion of the nature that you have 
just described. I do not think there are very many of them that do.
  However, it is clear that what is happening here is that $15 billion, 
for instance, of the elimination
 of the tax, the alternate minimum tax on corporations, which you would 
give back $15 billion to corporations, would be taken by the Republican 
proposals as $15 billion directly from financial aid for American 
students, who really do cut across the middle class in this country.

  Mr. HOKE. Mr. Speaker, I am going to reclaim my time. It does not 
answer the question, and frankly, that disinforms, it confuses the 
public. In a word, being polite, it fogs the facts, at the very least.
  Mr. Speaker, I want to quote a very famous American, and I'm not 
going to say who it is, but I want to quote some of the things that he 
said in the not very distant past at all.
  First of all, he had said ``Our present system exerts too heavy a 
drag on growth. It siphons out of the private economy too large a share 
of personal and business purchasing power. It reduces the financial 
incentives for personal effort, investment, and risk-taking.''
  He goes on to say ``Our tax rates are so high as to weaken the very 
essence of the progress of a free society, the incentive for additional 
return, for additional effort.'' Then he says ``I am confident that the 
enactment of the right tax bill will in due course increase our gross 
national product by several times the amount of taxes actually cut.''
  Who was this unrepentant supply-sider? Who was it? Jack Kennedy. That 
is who it was. He knew that by reducing tax rates, you increase 
revenue.

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