[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4167-H4171]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                              {time}  2015
                REAL TAX RELIEF FOR THE AMERICAN PEOPLE

  The SPEAKER pro tempore (Mr. Bilbray). Under the Speaker's announced 
policy of January 4, 1995, the gentleman from Pennsylvania [Mr. Fox] is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. FOX of Pennsylvania. Mr. Speaker, I appreciate this opportunity 
to speak up on behalf of the American people, I think, who are waiting 
for the House of Representatives to take its first step towards real 
tax relief.
  The fact of the matter is there are three goals that the American 
people 
[[Page H4168]] want us to have. First, they want to make sure we have 
deficit reduction, they want to make sure we have spending cuts, and 
they want tax cuts.
  We have already passed, within the Contract With America, $180 
billion in deficit reduction. We have already passed $190 billion in 
spending cuts.
  What awaits action tomorrow by this House of Representatives, Mr. 
Speaker, is the tax cut part, the three parts of the Contract With 
America to help our senior citizens, to help businesses, to help 
individuals, and to help everyone who lives here in the United States 
by having a better chance to get a job, a better chance to keep a job, 
and a better chance to keep their family together, because these tax 
credits and these tax cuts are of real value to the American people.
  We have seen over the period of time, Mr. Speaker, that the 
government is too big. It spends too much, and the American people 
remain overtaxed. As we cut spending, American families deserve tax 
relief. That is why 76 percent of the tax cuts go directly to families.
  We also want to make sure that when America's families say good-bye 
to one another in the morning, they have good jobs to head off to. 
Twenty-four percent of the tax cuts go to job creation. The tax money 
is not ours. It belongs to the taxpayers. It is about time we cut 
Government spending, reduce the size of the Government, and let people 
keep more of what they make.
  Our tax cuts, which represent 2 percent of Federal spending over the 
next 5 years, are fair, they help Americans from all walks of life, and 
they will lead to a better future with better jobs.
  First, let me speak about the family tax credit. This bill would 
provide families with a $500 tax credit for each qualifying child under 
age 18. This will help families with their expenses.
  The marriage penalty tax relief: This would make sure that married 
couples who file joint returns would be eligible to claim an income tax 
credit. Generally the credit is intended to mitigate the unfavorable 
tax consequences that the present law has, which may arise when two 
single workers marry.
  The American dream savings account: For so long now, we are talking 
about in this bill a new savings vehicle called the American dream 
savings account. This would permit annual nondeductible contributions 
of up to $4,000 for a married couple filing a joint return, $2,000 for 
an individual.
  We are also talking about deductible contributions to spousal IRA's, 
individual retirement accounts. This will increase savings and 
encourage each family to prepare for the future. This bill would permit 
deductible IRA contributions up to $2000 to be made for each spouse.
  Senior citizens' equity: The Republican Majority has called for, and 
this bill would allow for, the repeal of the 1993 Clinton increase in 
the amount of Social Security benefits which are subject to income 
taxation.
  The present law requires senior citizens, most of them, to pay income 
tax on up to 85 percent for their Social Security benefits. This would 
roll it back to 15 percent.
  It also would raise for the first time Social Security income and 
allowances. Right now if you are getting Social Security and you are 
employed, you can only make $11,280. Under our proposal tomorrow, this 
would over 5 years gradually raise to $30,000 that senior citizens 
could earn.
  Not only would it give them the chance to have more funds to in fact 
pay for expenses--many of them are living on fixed income--but, Mr. 
Speaker, it would also bring more tax dollars into the system. It would 
extend the quality and the length of years for our seniors who have 
given so much to our country and to each of us.
  This would also provide, the same legislation, tax incentives for 
private long-term care insurance. This would improve for health for all 
Americans. Long-term care is always thought of as expensive care, but 
under
 this tax incentive for private long-term care insurance it would be 
encouraged.

  It would also allow for tax-free withdrawals from IRA's for just this 
kind of insurance, long-term care. It would also give accelerated death 
benefits under life insurance contracts. The bill would provide 
terminally or chronically ill individuals with new means of paying 
their increased medical bills and living expenses.
  Finally, let us talk about capital gains relief. Mr. Speaker, this 
bill contains four different capital gains provisions, the most 
important of which would be a 50 percent capital gains reduction for 
individuals. This would encourage savings, business expansion, and job 
creation. It also would provide a 25 percent corporate alternative tax 
for capital gains.
  Everyone knows that capital gains is going to help this country move 
forward. It will be the kind of stimulus that would encourage 
investment, savings, and new jobs.
  Within this legislation will be pension reform for the Members of 
this House. It will call for our pensions to be more akin to Federal 
employees' and not some bloated pension that was in prior Congresses. 
This is the kind of recovery and reform where we are leading by 
example, Mr. Speaker.
  This goes part and parcel with the franking reform we are discussing, 
and we are going to act on; the gift ban we are going to act on; and 
campaign reform we are going to act on. It is part of moving this 
Congress to the kind of new credibility that the American people want 
us to have.
  Mr. Speaker, as well, this legislation would allow for expensing for 
small businesses. The bill would increase the amount of property a 
small business can expense. This would have the effect, of course, of 
encouraging the engine of our economy, Mr. Speaker, small businesses, 
the chance to grow, produce, and hire.
  This is certainly what we want to do, because the backbone of our 
country are the small businesses. You have heard time and again from 
the U.S. Chamber of Commerce and the National Federation of Independent 
Businesses just how important it is to help our small businesses grow.
  We already passed legislation to have the 25 percent deduction for 
the insurance paid for by the employers. We hope that will now go to 
100 percent, but this is one more way we can help small businesses in 
fact meet their expenses and be able to meet their payroll, and then be 
able to move on to new heights.
  There is also within this legislation, Mr. Speaker, tax credits for 
adoption expenses of up to $5,000; tax credits for the care for the 
elderly. This is very important to individuals throughout the country 
in every single State.
  Mr. Speaker, the fact is we can have all three with this legislation. 
We can have our spending cuts, which are very important to trimming an 
out-of-control Federal budget. We can have our deficit reduction. We 
also can have our tax cuts.
  The fact is, without all three, the country won't move forward. New 
jobs can't be created, and we won't realize the American dream.
  We have other legislation that is going to happen after the 100 days. 
We are talking about the kind of review where we are going to sunset 
Federal agencies. The freshman class has come forward with the possible 
dissolution or elimination of certain agencies and functions, but we 
have legislation as well that is going to call for every 7 years to 
review Federal regulations, to review Federal agencies, and to sunset 
those regulations and those agencies when they are not performing.
  This is all part and parcel of the 104th Congress moving forward. I 
believe, Mr. Speaker, with the adoption of these tax cuts, we will in 
fact realize the dream that many Americans want us to have, to keep the 
contract.
  We already had the balanced budget amendment. We have a line-item 
veto. We have prohibited unfunded mandates being sent back to States 
and local governments. We have had regulatory reform, legal reform. Now 
we need to have the final, 10th item on the contract for us to deliver 
on.
  We believe this is legislation, Mr. Speaker, that is bipartisan in 
nature. This is not just Republican or Democrat, this is not for 
liberals or conservatives, for those who live in the North, the South, 
the East, or the West.
  This legislation, this tax program, is something that every Member 
can embrace. We hope that the Senate, once it is passed in the House, 
will find favor with it as well, because the American people have, by 
overwhelming numbers, said a tax cut, as long as you are going to have 
deficit reduction, spending
 cuts, is consistent with what the 
[[Page H4169]] American dream is all about: expanding opportunity, 
helping us keep jobs and get more jobs, helping us make sure that each 
family in fact has the opportunity to help provide for their children, 
to make sure they can buy a home, and to make sure that they can 
provide for their expenses.
  That is what these tax cuts will do, give them that kind of 
flexibility, Mr. Speaker. We believe this is a step in the right 
direction. No one piece of legislation is going to solve all the 
problems. It takes cooperation. It is going to take persistence. 
However, this legislation is a step in the right direction. Tax-and-
spend prior Congresses have been out of touch, been out of control.
  This 104th Congress has already seen, by bipartisan adoption of the 
contract items which have overwhelming numbers from the Republican 
side, and great numbers, as well, from the Democratic side, that we can 
stop the finger pointing, we can stop the gridlock, and we can work 
together for the American people. That is what they want us to do.
  They want us to work together. They want us to make sure when we go 
to Washington, we don't get caught in that Beltway mentality of an echo 
chamber that says ``Whatever you are doing is fine.'' We need a make 
sure we keep track back home, go to those town meetings, and hear what 
they are saying.
  What I am hearing is they want tax cuts, but they want to make sure 
they are tied to deficit reduction. That is what this legislation does. 
Under the proposal from the gentleman from Delaware, Mike Castle, and 
as well from the gentleman from Michigan, Fred Upton, and also from the 
gentleman from New Jersey, Bill Martini, we are going to have that 
initiative within this legislation which will make sure that we tie the 
tax cuts we are speaking of to deficit reduction. That is very 
important for our long-term economic health.
  However, I believe that you will find that senior citizens can 
certainly find favor with this. Couples, married, middle class 
individuals, everyone in the economic stream will find that this 
legislation is going to give us that boost. It is going to give us that 
hope.
  Together with our great community groups that are doing wonderful 
things in the private sector to help our communities be strong, we can 
make sure that we are doing our part by getting out of the way of 
business, helping expand opportunity, and making sure that House bill 
1215, which is the tax cut legislation, will in fact move us forward.
  I believe this is a step in the right direction. I would like to call 
on the gentleman from Michigan, Nick Smith, at this time to continue 
this dialogue with the American people, because we need to make sure, 
Mr. Speaker, that in fact this legislation is adopted for the benefit 
of all Americans, and for moving our country forward.
  Mr. Speaker, I yield to the gentleman from Michigan.
  Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman from 
Pennsylvania [Mr. Fox] for yielding to me.
  Mr. Speaker, first let me say that it is individuals like the 
gentleman from Pennsylvania [Mr. John Fox], who are part of the driving 
force that is keeping the momentum going in this Congress to do the 
tough job of cutting spending and balancing the budget, and at the same 
time cutting taxes, so my compliments to the gentleman from 
Pennsylvania and my colleagues in the freshman class.
  I think the question we really need to address, Mr. Speaker, is what 
do we want, what are we after, what do we want to achieve. I think 
probably it is a nicer, more friendly, better place to work and to live 
and to raise our kids.
  How do we get there, I think is the next question. Part of what we 
need is more and better jobs in our society. Right now that is a real 
challenge. What we have seen over the last 40 years is a situation 
where we continue to increase the taxes on individuals and businesses 
so that government can do the things that they think are good for you.
  We are suggesting now that we leave more of that hard-earned money in 
the pockets of people that are out there working for that money, and 
let them decide how to spend it, instead of this huge, overbloated 
government bureaucracy in Washington, DC.
  What has happened in this country is our savings rate that used to be 
high, we have one of the lowest savings rates out of the industrialized 
world. When you add to that low savings rate the fact that the Federal 
Government is now overspending $300 billion a year, if you include what 
we are borrowing from the Social Security Trust Fund, we are 
overspending $300 billion a year, that in itself is negative savings, 
so we end up, compared to the rest of the G-7 countries, at the bottom 
of the totem pole on savings. That means there is less potential money 
out there to borrow, to lend.
  The Federal Government now borrows 42 percent of all the money that 
is lent out. Last year, out of every cent and every dollar that was 
borrowed, here is the Federal Government saying ``Hey, we have to have 
that money, because we are doing important things.'' They are borrowing 
42 percent of that dollar.
  Somehow, Mr. Speaker, we have got to expand capital formation in this 
country. All economists agree that expanding capital and capital 
investment is the key to economic success. We have a low savings rate. 
The Federal Government's overspending has driven up the interest rates 
to businesses. What can we do to encourage productivity in this 
country, and allowing our businesses to be more competitive with the 
businesses in other countries?
  If you look at the way the United States taxes our business when they 
invest money in equipment, in machinery, in facilities, we see that our 
marginal tax rate is higher on our businesses than almost any other 
country in the world. So what we are doing is we are penalizing the 
business when they buy that machine or that tool or build that new 
facility to allow their workers to work more efficiently, because here 
is what has happened. Let me tell you the way it works in this country.
                              {time}  2030

  We have a Tax Code that says that if you buy this new machinery and 
equipment you are going to have to spread the deduction out over the 
useful life of that machine or equipment or facility. That means that 
as we require them to spread this out over 5 or 10 or 15 or 20 or 30 
years that inflation eats up the value of that deduction.
  So what we have in this tax bill that we are going to start 
discussing tomorrow is we have a provision that says, look, for small 
businesses, we are going to stop penalizing you for buying that 
machinery and equipment, and we are going to allow you to deduct that 
as a business expense in the year that you purchase that machinery or 
equipment or facility, up to $35,000. That stops the penalty.
  We are additionally saying for that out-year depreciation we are 
going to allow you to index that depreciation for inflation so 
inflation does not eat up the value of that deduction when you get to 
it.
  Here is what the economists say is going to happen if we pass this 
bill into law. It is going to reduce the cost of machinery and 
equipment and those facilities by 16 percent.
  What is going to happen if we lower the cost of new, modern, state-
of-the-art tools that we can put in our workers' hands by 16 percent? I 
will tell you what is going to happen. Businesses are going to buy more 
of it. Those manufacturers that produce those tools and equipment, 
those builders and workers that build those facilities are going to 
build more of them and produce more of that machinery and equipment 
because now there is a higher demand for it.
  The economists project that if we pass neutral-cost recovery into law 
and if we increase the expensing from the current $17,500 up to $35,000 
and if we stop the penalty of the alternative minimum tax, we are going 
to end up with 3 million new additional jobs by the year 2000; we are 
going to increase the average salary, the average wage of these 
individual workers all across the United States by $3,500; and we are 
going to expand the gross domestic product by $1 trillion. That is 
going to result in increased revenues coming into the Federal 
Government.
  So the point is, as we look at the rest of the countries around the 
world we are, in effect, treating our businesses with greater penalties 
when they buy this machinery and equipment. And we 
[[Page H4170]] cannot continue to do that. It is a postwar era. It is a 
situation where every country now wants to develop the kind of laws, 
the kind of tax policies to attract capital.
  If you look at Adam Smith, Adam Smith says the countries that are 
going to progress and produce those jobs are the countries that have 
the kind of tax policies that attract capital formation.
  Ludwig Vaughn Mises in 1949, when he came to this country, he looked 
around and he said, ``Why is the United States moving ahead of the rest 
of the world?'' What he said, he said it is because we have a policy in 
this country of encouraging savings and encouraging capital investment. 
That is exactly what this tax bill does.
  I encourage my colleagues to sit down and figure out what can we do 
as a Nation to increase the number of jobs, increase the quality of 
jobs and, ultimately, increase the quality of life.
  I would suggest that one part of that situation, part of that 
decision, part of that conclusion has got to be treating our businesses 
on our Tax Code similar to what happens in other countries, treating 
our families similar to what other countries are doing to their 
families in terms of the tax obligation.
  If you are an average family now in the United States with at least 
one person working, you now pay over 40 percent of every dollar you 
make in taxes. So what this Contract With America is suggesting is not 
only do we lower taxes but we cut spending enough that we get on the 
glide path toward a balanced budget. That is so important.
  I see my colleagues on the liberal side saying, ``Don't cut taxes. 
Don't cut taxes.'' I would simply remind everyone that it was about a 
year and a half ago that we had the largest tax increase in the history 
of this Nation, a $250 billion tax increase. Some of us on the 
Republican side said, look, since the economists say that a tax 
increase is bad for the economy, should we be giving a tax decrease as 
part of our Contract With America? The overwhelming answer was yes.
  The next question was, how do we reduce taxes? We decided to give it 
to families and families with kids. We decided to give it to senior 
citizens. We decided to give it to businesses in such a way that they 
are going to expand their jobs and the employment opportunities. That 
is what the Contract With America said. That is what we are doing.
  This week we are taking up that tax bill, but I need to remind 
everybody that being on the glide path to a balanced budget is just as 
important as these tax reductions.
  The interest on our gross Federal debt this year is $339 billion; 
$339 billion is 25 percent of all revenues coming in from all sources 
to the U.S. Government. We have got to get on this glide path. We 
cannot continue saying that these are good programs, they should not be 
cut, we should not tamper with all of the things that the Federal 
Government is doing.
  The fact is that we have had no shortage for good ideas on good 
programs. We are not only cutting the fat now. We are going to move 
into some cuts that are going to affect all of America. It is going to 
be Americans that are going to have to decide, look, are we willing to 
sacrifice a little so that we do not leave our kids and our grandkids 
with this huge mortgage and this huge debt that is now $5 trillion?
  I thank the gentleman from Pennsylvania for yielding. I think it is 
so important that we have this debate, that we have this discussion, 
and I appreciate this opportunity, I say to the gentleman from 
Pennsylvania [Mr. Fox].
  Mr. FOX of Pennsylvania. I thank the gentleman from Michigan [Mr. 
Smith] for his leadership, frankly, in the House. We have relied on 
several key individuals who are veterans here in Congress to move 
forward this dialogue, Mr. Speaker. The gentleman from Michigan [Mr. 
Smith] has certainly been someone in whom we have relied in the 
Republican Conference as well as the entire House because he has spoken 
out for our seniors, for our families and for our businesses, our small 
businesses that really drive the economy.
  I wanted, Mr. Speaker, if I could, to continue the dialogue that the 
gentleman from Michigan [Mr. Smith] has started with regard to some of 
the other points that were raised in view of the importance of what is 
happening here tomorrow on this historic debate with regard to tax 
credits and tax cuts.
  The gentleman from Illinois [Mr. Hastert], the lead sponsor of the 
Senior Citizens Equity Act, has said it is time to retire the high-tax 
burden on our Nation's seniors, instead of retiring older Americans who 
want and need to work to remain independent, productive members of 
society. That is just what this
 tax cut bill will do.

  The bill includes several tax-cut provisions designed to allow all 
Americans, poor, middle class, young and old, to keep more of their 
hard-earned money they would otherwise turn over to bureaucrats.
  H.R. 1215 also has the added benefit of reducing the budget deficit. 
The bill will include caps on discretionary spending that the 
Congressional Budget Office says will cut the deficit by $91 billion 
over 5 years, which is $62 billion more in deficit reduction than 
President Clinton proposed in his budget.
  While H.R. 1215 helps families and promotes economic growth and 
increase jobs, it also helps millions of senior citizens. It will make 
sure that the earnings limit, which has punished low-income seniors, 
will, in fact, be changed. Seniors want to work, and they are needed in 
the work force. The earnings limit increase will help all Americans.
  The long-term care insurance that we have discussed in the 
legislation will ease the financial drain on seniors and their 
families. It will give private, long-term care insurance the same 
preferable tax treatment as accident and health insurance. It will 
exclude from income up to $200 per day in long-term care benefits, will 
allow long-term care services to be treated as medical expenses.
  I would like to now at this time yield to the gentleman from Michigan 
[Mr. Smith] for further comments regarding the benefits of this 
legislation.
  Mr. SMITH of Michigan. I thank the gentleman from Pennsylvania for 
yielding.
  These are two interesting charts. We talk about tax day, how long you 
have to work into the year to use that income to pay the Federal 
Government in taxes. Right now, tax day is June 4.
  Under the administration's proposal, we actually increase taxes; and 
tax day by the year 2002 goes to June 7.
  With this tax bill that we are about to pass tomorrow, actually tax 
day, because of the tax reduction, goes back to May 26. Some people say 
maybe that is not far enough. Maybe we should reduce taxes more. But 
this is a giant start.
  Members of Congress are not used to taking away things from people. 
Our political careers have sort of depended on giving more and more to 
people.
  I like to use the comparison of the Alamo and thinking that maybe one 
of the reasons those at the Alamo fought so hard was that there was not 
any back door. But in our Federal Government there is a back door, and 
that back door is taxing and borrowing. So we have continued to tax and 
we have continued to borrow to increase the propensity that we will be 
reelected by doing more things for more people. That has got to come to 
a stop if we give a hang about our kids and our grandkids.
  We have heard a lot of people say, ``Look, it is a tax break for the 
rich.'' Actually, if you look at the tax cut for working-class 
families, if you are a family making less than $25,000 your taxes are 
reduced by 100 percent. If you are a family making $30,000, your taxes 
are reduced by 48 percent; $45,000, they are reduced by 21 percent; 
$50,000, reduced by 17 percent.
  You see on down there, if you are a family making over $200,000, your 
taxes are only reduced by 2 percent. All of the economists have 
indicated that a tax increase is a depressant on the economy. That is 
where it is important that we modify the $250 billion tax increase that 
we had a year and a half ago and that we do it in such a way that it 
promotes jobs, promotes business and promotes a better life.
  I go back to John Kennedy, because the idea that reducing taxes was 
good for the economy is not a Republican idea. John Kennedy said that 
when he came in, he went and he reduced taxes. This chart just shows 
what happened 
[[Page H4171]] after the Kennedy tax cuts. The real gross national 
product of this country in 1963 went from 4 percent, in 1964 it 
increased 5 percent and then in 1965 and 1966 it went on to 6 percent. 
The personal savings in billions went up. Business investment, which 
means jobs, went up.
  Mr. Speaker, I plead with my colleagues, I plead with the American 
people, let's move ahead, let's have some of these tax cuts that are 
going to promote and expand our business, our economy and the well-
being of the American people, and let's go ahead and cut the kind of 
spending cuts that are needed to get us on the glide path to a balanced 
budget and ultimately achieve that balanced budget by 2002. These tax 
cuts do not go into effect until we have passed the bill that lays out 
and locks in how we are going to reduce spending and get to a balanced 
budget by the year 2002.
  Again I thank the gentleman from Pennsylvania [Mr. Fox] for yielding 
and I appreciate this opportunity.
  Mr. FOX of Pennsylvania. I thank Mr. Smith for his participation in 
this meaningful dialogue. The American people are waiting for what we 
will do to not only continue our fight to have the reduction in our 
deficit, a spending cuts reduction but also the third part which they 
are looking for now are the tax cuts, how we will make it possible.
  We have heard from some on the other side of the aisle that say we 
are going to pay for these tax cuts at the expense of students. Nothing 
could be further from the truth. There is no Republican proposal to 
eliminate the Pell Grant Program, the college work study program, or 
the student loan program. We are going to continue these programs and 
they are very valuable to our students.
  Let me look if I may, Mr. Speaker, to some very important individuals 
who, in fact, are Governors of four States who know best what has 
happened on a State level when they have cut taxes. What has happened 
in four States. I could give now at this time a letter which goes to 
some of the points they have made in recent discussions before my 
colleagues here in the House.
  The four governors we are speaking of are William Weld, Tommy 
Thompson, John Engler, and Christine Todd Whitman. They write in 
support of the efforts both to cut Federal taxes and reduce the Federal 
budget deficit. As Governors, they have all cut taxes the same time. 
Yet they have also balanced their budgets.
                              {time}  2045

  They have not accepted the false dichotomy that claims that 
governments, State or Federal, can only balance their budgets, or cut 
taxes, but not both. They have been able to do both in their State 
capitals, exactly what we need to do in the Nation's Capital, cut the 
deficit and cut taxes and cut spending. They believe that government 
has a moral responsibility, as I do, to make the tax burden on the 
people of this country as low as possible and that focusing on the so-
called revenue loss leads down a path that asks the question, the wrong 
question, ``How much does a given tax cut cost government?'' That is 
like worrying that a bank vault might reduce the income prospects of a 
bank robber.
  Our motto instead should be this:
  ``There is no such thing as government money, only taxpayers' 
money.''
  The burden of proof is on those who would increase taxes. The burden 
of proof is also on those who advocate current rates of taxation in the 
face of rational, just, and economically compelling arguments in favor 
of tax cuts. In short, we should be cross-examining government 
expenditures, not tax cuts.
  The Governors think, as I do, that taxes are too high.
  In Massachusetts they cut taxes nine times over the past 4 years, and 
yet they do not face a problem of either declining revenues or 
unbalanced budgets. In fact their tax revenues have grown by $2.2 
billion over that time period. They have balanced six consecutive 
budgets despite the nine tax cuts, but, in fact, because they have the 
tax cuts.
  In Michigan, 15 tax cuts in 4 years have turbocharged the State's 
economy to its best performance in a generation. These cuts include 
cutting property taxes on homeowners by two-thirds, Mr. Speaker, 
eliminating the State's tax on capital gains, cutting property taxes, 
private pensions and inheritances. While taxpayers are saving more than 
$1 billion annually, State revenues have continued to rise in Michigan.
  In Wisconsin they cut taxes by more than $1.5 billion over the past 8 
years, including the income tax, capital gains tax, inheritance tax, 
and gift tax. What happened, you say? Their economy created new jobs at 
nearly double the national rate and more new manufacturing jobs than 
any other State in the
 Union. Revenues to State government grew by 48 percent, and they 
balanced their budget each and every year. The lesson from Wisconsin is 
clear: Tax cuts help create jobs and opportunity for families and 
individuals and more revenue for government.

  In New Jersey they promised to cut State income taxes by 30 percent, 
and Governor Whitman delivered over 3 years to create jobs and spur 
economic development through private-sector investment.
  When the people's money is in the hands of government, it falls into 
many pits of stagnation dug by Washington bureaucrats. Money in private 
hands, however, Mr. Speaker, actively seeks out the entrepreneurial 
ventures of the present day that become the future job creating 
companies. By overtaxing, government has in its power to destroy small 
business, whether it be your home State of California, Mr. Speaker, or 
my home State of Pennsylvania. Before it is ever launched, we do not 
want to make a family choose between paying their rent and putting 
money aside for their children's education, to destroy a family's dream 
of owning a home.
  A reduced capital gains burden will also be likely to persuade people 
to hold on to their investment longer, thereby increasing economic 
growth and the effect on the entire economy. When more stocks are 
bought and held longer, moreover, interest rates will tend to be lower 
as companies will rely less on borrowing. As a consequence the same 
family will find buying a home more affordable.
  In short, tax cuts start not a vicious cycle that imperils fiscal 
stability, but a chain of prosperity that touches almost everyone, 
children, the parents, home buyers, and home builders.
  The arguments against tax cuts just do not fly, Mr. Speaker, as they 
did in Massachusetts, Michigan, Wisconsin, and New Jersey. There is no 
either-or dilemma here when it comes to taxes, spending, and deficits. 
They can all be cut. Washington has an obligation to follow the States 
and to do for the American people what they want, and that is to make 
sure we help get the American dream, we achieve it in our lifetime, 
helping our children and grandchildren by continuing our trend of 
spending cuts, deficit reduction, and the tax cuts they want as well.
  Mr. Speaker, I say, ``Thank you for my colleagues for listening and 
for hopefully voting with us tomorrow to make a difference for America, 
to make government smaller and to make our dreams brighter.''


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