[Congressional Record Volume 141, Number 71 (Tuesday, May 2, 1995)]
[Extensions of Remarks]
[Pages E918-E919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              CONTRACT WITH AMERICA TAX RELIEF ACT OF 1995

                                 ______


                               speech of

                           HON. LEWIS STOKES

                                of ohio

                    in the house of representatives

                        Wednesday, April 5, 1995

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 1215) to 
     amend the Internal Revenue Code of 1986 to strengthen the 
     American family and create jobs:

  Mr. STOKES. Mr. Chairman, I rise in strong opposition to H.R. 1215. 
In taking this position, let me first make it clear that I have 
consistently supported efforts for real tax relief for our Nation's 
working citizens and their families. 
[[Page E919]] However, I cannot and will not support this ``Reverse 
Robin Hood'' tax relief package that robs from the poor and gives to 
the rich.
  I am also mindful of my duty as a Member of Congress to act in the 
best interest of the people I represent. That is why I cannot, shirk my 
responsibility to act in the best interest of all the American people 
by transferring nearly $189 billion from programs that help the 
neediest Americans, to our Nation's most privileged and wealthy 
Americans. This shortsighted and rushed legislation before us will fail 
to put a dent in the deficit, but will plunge scores of Americans on 
the edge of poverty down that slope and decrease the standard of living 
for this Nation's middle class and working poor.
  H.R. 1215 represents the majority's most significant attack on poor 
and working citizens of this country. It is cynical and repugnant to me 
that this bill, under the guise of providing tax relief to Americans, 
seeks to cut: Federal retirement packages; Medicare for our elderly; 
welfare for innocent children; wages for organized labor; and 
eliminates or reduces spending on countless other Government programs 
that help protect our economy, our citizens, and the environment. This 
flawed and hurried measure should be defeated because it represents a 
clear attack on the neediest in America.
  The stated purpose of H.R. 1215 is to cut taxes for individuals and 
businesses by $189 billion. Under this bill, families making up to a 
quarter of a million dollars a year would receive a tax credit of up to 
$500 per child, excluding low-income families who don't make enough to 
qualify for significant tax cuts. This legislation also contains 
provisions that significantly reduce the tax on capital gains income, 
repeal the minimum tax on corporations, and provide businesses with 
more generous tax loopholes.
  While I agree that Congress should look to provide tax relief to all 
Americans whenever fiscally prudent, the attempt to pit less privileged 
citizens against our most privileged corporations and citizens is 
offensive. This legislation goes well beyond its legitimate objective 
of providing tax relief. In fact, this bill is specifically designed to 
enrich big businesses and our Nation's wealthiest Americans.
  Contrary to the assertions of the Republican supporters of H.R. 1215, 
52 percent of the benefits of this so-called tax relief will go to the 
top 13 percent of taxpayers making over $100,000 per year. The facts 
clearly show that the nearly 61-percent of the population that 
constitutes poor and middle class citizens share of the tax cuts 
represents only 16 percent of the benefits of tax relief. While I 
applaud all Americans who have been able to enrich themselves through 
hard work, innovation, and creativity, I cannot support a tax relief 
package that so disproportionately benefits the top 13 percent of the 
American public.
  This legislation does not stop at providing huge, disproportionate 
advantages to rich individuals through tax cuts. H.R. 1215 also exempts 
some corporations from paying any corporate tax on their profits. By 
repealing the corporate minimum tax enacted in 1986 designed to assure 
that profitable companies have to pay some reasonable amount in Federal 
income taxes, many wealthy corporations will be able to use H.R. 1215's 
tax loopholes to avoid paying any tax at all.
  Prior to the enactment of the 1986 minimum tax, nearly 50 percent of 
this Nation's wealthiest and largest corporations were able to pay no 
Federal income tax. Adoption of this bill will return us to the days 
when companies profited while citizens paid--AT&T received $636 million 
in tax rebates between 1982 and 1985, despite making $24 billion in 
pre-tax profits--DuPont supplemented $3.8 billion in pre-tax profits 
with $179 million in tax rebates--General Dynamics benefited for 4 
years from 1982 to 1985 by paying no taxes and received a total of $91 
million in tax rebates. Companies like these will be able to enjoy 
paying no Federal income taxes under the unfair and ill-advised 
provisions of this tax bill.
  In addition to providing tax breaks to America's richest citizens and 
corporations, this bill also fails to provide meaningful deficit 
reduction. The fact is, under current law we will enjoy greater future 
deficit reduction in fiscal years 1999 and 2000 than would be enjoyed 
if this bill is adopted into law. The cost of the Republican tax cuts 
will total $189 billion in the first 5 years and, according to the 
Treasury Department estimates, that cost will balloon to over $630 
billion by fiscal year 2005. Therefore, by fiscal years 1999 and 2000, 
deficits under current law would be $3.8 billion and $12.4 billion less 
respectively, than deficits under H.R. 1215. We all agree that deficit 
reduction in and of itself is a good thing, but as projections show, 
this Republican legislation simply does
 not deliver any better deficit reduction than we would experience 
under current law.

  Mr. Chairman, the unfair distribution of the benefits of this bill 
and its bogus deficit reduction claims were not enough for our 
colleagues on the other side. They would have us pay for these tax 
breaks for the rich by mandating a massive $189 billion in Federal 
spending reductions in programs serving those who can least afford it.
  The largest portion of the spending cuts is characterized in the bill 
as ``general purpose'' spending cuts, totaling $100 billion over the 
next 5 years. The effects of these proposed cuts will be unmistakable--
they will fall on the poorest, the most vulnerable, the most needy of 
our citizens. They will fall especially hard on the elderly, the 
disabled, and children.
  This assault on the well-being of these individuals is worsened by 
the transfer of over $62 billion in welfare funding to finance this tax 
break for the rich. This action is a cruel and callous attempt to 
eliminate the most basic income support for desperately needy children 
and their families. There is no doubt that many of our Nation's poor 
will suffer under this proposal. Almost 70 percent of the individuals 
currently receiving benefits, or 9.7 million people, are children. 
According to the Department of Health and Human Services, it is 
estimated that more than 6 million children would lose their financial 
support to finance this tax cut for the rich.
  In addition to the $100 billion in general purpose spending cuts and 
$62 billion in welfare cuts, this bill will snatch $11 billion from 
Federal employees pensions, and over $10 billion in Medicare cuts for 
medical treatment for our elderly.
  It is my belief that H.R. 1215, and the circumstances under which it 
is presented in this House, attempt to mislead the American people to 
believe that unfair and insensitive solutions will cure what ails this 
Nation. Nothing could be further from the truth. This legislation 
unfairly and unjustifiably expands the gap between rich and poor, and 
contributes to the impoverishment of our neediest citizens. The 
American people elected us to act in their best interest, not 
compromise their welfare because the new Republican majority wants to 
satisfy campaign promises and grant tax breaks to the rich. I strongly 
urge my colleagues to vote against this bill.


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