[Congressional Record Volume 141, Number 110 (Monday, July 10, 1995)]
[Senate]
[Page S9643]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                             TAX CUTS WORK

 Mr. ABRAHAM. Mr. President, one of the most frequent questions 
asked during the debate over the budget resolution was why, in the face 
of large deficits, were Republicans insisting on tax cuts. The answer 
is simple: Tax cuts work. By allowing Americans to keep more of what 
they earn, tax cuts encourage economic growth, job creation, and an 
increase--not decrease--in revenues to the U.S. Treasury.
  Following the Reagan tax cuts in 1981, we witnessed one of the 
longest economic expansions in the history of the United States. Over 
20 million new jobs were created while revenues to the Treasury 
increased dramatically. Just as importantly, the benefits of the Reagan 
tax cuts were felt by Americans from all income classes--rich and poor.
  Tax cuts enacted this year could achieve similar results. I am 
including a short article by Malcolm S. Forbes, Jr. which makes an 
eloquent case for reducing the burden on the American taxpayer. As Mr. 
Forbes makes clear, Republicans can, and should, cut taxes and balance 
the budget at the same time.

                            Fact and Comment


                   memo to the gop: the 1980's worked

                       (By Malcolm S. Forbes Jr.)

       Republicans have accepted the notion that the 1980s were a 
     big fiscal mistake, that Ronald Reagan was wrong to insist on 
     tax cuts even in the face of congressional resistance to 
     reducing spending.
       Republicans are now in effect saying that no budget cuts 
     mean no tax cuts. The GOP has it backwards. Properly 
     structured tax reductions would trigger a robust economic 
     expansion, as they did in the 1980s. They should be the 
     center on which budget cuts are structured. Voters would thus 
     see the GOP as the party of opportunity and growth, not as 
     the party of austerity. Growth would also expand government 
     revenues.
       Reagan's much-criticized tax cuts were the principal 
     catalyst of our longest peacetime expansion. Federal income 
     tax receipts grew mightily. Even more impressive was the 
     extraordinary surge in revenues of state and local 
     governments. The federal deficits of the 1980s resulted from 
     our unprecedented peacetime military buildup--which finally 
     won the 40-year Cold War for us--and, more important, from 
     Congress' inability to say no to domestic spending 
     constituencies. If Republicans combine Reagan's pro-growth 
     tax approach with their antispending proclivities, they will 
     get credit for reviving the economy and curbing government.
       Why should Republicans buy their opponents' bum raps about 
     what actually happened when Reagan ruled?
     

                          ____________________