[Congressional Record Volume 142, Number 47 (Monday, April 15, 1996)]
[Senate]
[Pages S3258-S3268]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TAX DAY

  Mr. COVERDELL. Mr. President, if he were still alive, President 
Roosevelt would say April 15 is ``a day that will live in infamy.'' We 
have all come to know this very special day as one of great dread in 
our country, as we come to grips with the enormous burden every 
American family, every Georgia family, every citizen comes face to face 
with--the direct burden of Government and the enormous consumption of 
the wages of labor that are consumed by the U.S. Government and 
government in general.
  Depending on what you count, today Americans work from January 1 
until about June 31 for the Government before they are able to keep the 
first dime for themselves, their families, their educations, their 
dreams. I think Thomas Jefferson must surely have many times rolled in 
his grave because he could never, ever have anticipated that there 
would come a time that nearly half the resources of those who labor for 
it are removed from those families and those individuals and sent to 
some government to redetermine what ought to be done with the wages of 
the person who earned it.
  To just quickly summarize--and I am going to yield to my good 
colleague from Tennessee--but in my own State, I have asked that a 
picture be made of the average Georgia family. This is the perfect day 
to reveal what that picture looks like--April 15. That average family 
earns about $40,000 a year. Both spouses work and they have two 
children. Remember, now, they earn around $40,000 a year. They spend 
$4,183 in Federal income tax liability of the $40,000. They spend 
$3,118 in FICA taxes. They spend another $844 in other direct and 
indirect Federal taxes. They forfeit $5,061 in local taxes, State and 
local. This family's share of the new regulatory apparatus we have been 
building for the last some 30-odd years--this is an unbelievable 
figure--is $6,615. This family's share of added interest costs because 
of our $5 trillion national debt is $2,957. That comes to $22,778, 51 
or 52 percent of all wages. Every average family in Georgia is working 
half time for somebody else--the Government.

  America depends on these families to raise the country. We ask them 
to house the country, to educate the country, to feed it and clothe it, 
transport it, and see to its health. But we only leave them half of all 
their earnings to do this great work that we have depended upon for so 
long. The end result is middle America, the average hard-working 
family, has been marginalized, has been literally pushed to the wall 
because of the consumption, the insatiable consumption of Government.
  I would have to say this is also the result of certain elitists in 
our country that have concluded that this average family in Georgia is 
unable to make decisions for itself and that decisions about its 
future, its health, its welfare are best made by some Washington wonk 
in the belly of one of these buildings in the Capital City, and it is 
better that their wages come here so that some bright person can 
determine how best this family ought to be preparing for its future and 
its needs.

[[Page S3259]]

  I reject that theory outright and I believe America does too. I did 
not believe I would ever be standing on the floor of the U.S. Senate, 
talking about average families in my State forfeiting nearly half their 
earned wages to support this burgeoning, growing, unfettered 
consumption by Federal and other governments.
  With that opening statement on this infamous day of April 15, 1996, I 
yield to the good Senator from Tennessee up to 10 minutes.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. FRIST. Mr. President, in recent years the words ``tax and 
spend,'' have been used together so often that, today, rarely do you 
hear one word, ``tax,'' without hearing the other word, ``spend.'' The 
phrase has become so common, so acceptable, so recognizable it 
approaches the use of words such as ``hand in glove'' or ``horse and 
buggy.'' It is just when you think of taxes, you think of spending.
  Like cliches that become popular because they deliver the truth with 
clarity and simplicity, ``tax and spend'' boils the point down to its 
essence. There is only one reason for raising taxes and that is 
spending more.
  We just heard my distinguished colleague from Georgia boil down this 
tax burden to the effect on an individual family. That tells the whole 
story. But I cannot help but to share with you this morning a 
conversation at breakfast, as I sat around the table with my wife and 
three boys, Jonathan, 10; Bryan, 8; and Harrison, 12.
  Jonathan said, ``You are coming back from recess, dad. What are the 
issues? What are you going to be talking about?''
  I said, ``Today is a big day for the American people. It is tax 
day.''
  And Jonathan said, as any young child does quite innocently, ``What 
is tax day? What does that mean?''
  I said, ``Jonathan, it has an impact on every, every family in this 
great country.''
  He said, ``What sort of impact?''
  I said, ``Today, people will be writing checks, where a huge portion 
of what they earn goes to Washington, DC, to the Federal Government.''
  He said, ``What do you mean?'' He said, ``Don't you pay sales 
taxes?''
  I said, ``Yes.''
  And he said, ``How much?''
  And I said, ``About 38 percent, on average, around this country, of 
income, of money that you take in, goes to government at the State, 
local, and Federal level, 38 percent; 38 cents on the dollar,'' I said.

  He looked up again with those innocent eyes and said, ``Well, why 
does anyone work if you have to give 38 cents away?''
  Clearly, it is much more complicated than that, but through those 
innocent eyes of a child, it does bring us to that real question of, 
why do we tax so much and spend money so extravagantly?
  Mr. President, unlike the current occupant of the Oval Office, 
President Calvin Coolidge was a man of few words. However, the thoughts 
he expressed when he chose to speak were quite precise; it hit the nail 
on the head.
  On the subject of Government spending, he once, very accurately, 
observed, ``Nothing is easier than spending public money--it does not 
appear to belong to anyone.''
  Apparently not.
  Federal spending has risen steadily and continuously over the last 40 
years, and to pay for it, so has the burden on the American taxpayer.
  Thirty-eight percent of a family's income is paid in Federal, State, 
and local taxes and, as we just heard, in Georgia it is even higher 
than that. But, on average, 38 percent. And the problem is getting 
worse. It was only 28 percent in 1955. Today, a taxpayer has to work 
more than 3 hours out of an 8-hour day just to get enough funds to pay 
the tax man.
  And if paying taxes were not bad enough, to add insult to injury, the 
Government makes it as hard as possible for everyone to comply. There 
are now 555 million words in the Tax Code with 4,000 changes made just 
in the last 10 years. There are 480 different tax forms provided by the 
IRS, and there are another 280 forms just to tell us how to fill out 
those 480 forms.
  Every year, in fact, the IRS sends out 8 billion pages of forms and 
instructions to 100 million taxpayers. This feat alone requires the 
pulp of 293,760 trees just to accomplish.
  This year, individuals will spend 1.7 billion hours filling out their 
taxes. Businesses will spend another 3.4 billion hours to fill out 
their taxes, and complying with tax laws will cost all of us about $200 
billion above and beyond the taxes themselves.
  But for some people, enough is never enough. In the first major 
action that President Clinton took, you guessed it, he raised our 
taxes, and when Republicans cut taxes as part of the Balanced Budget 
Act last December, the President vetoed the bill. Why? You guessed it, 
because he wanted to spend another trillion dollars on Government, not 
the people's, priorities.
  Tax and spend--one cannot live without the other.
  And what are those priorities of the American people? Today, all 
across America, the problems of crime, drug trafficking, and illegal 
immigration are out of control. Yet, while we have 24,000 FBI agents or 
6,700 DEA agents or 5,900 Border Patrol personnel, we have 111,000 
people working for the IRS. The Government cannot stop illegal drugs or 
illegal immigration, but it sure knows how to collect your money, even 
if it cannot manage its own.
  This month, the GAO audited the IRS. What it found was truly 
astounding. The General Accounting Office found that the IRS could not 
account for $10 billion it says it collected. The IRS could not fully 
explain $2 billion in expenses, and it could not use the sophisticated 
new computer equipment that cost taxpayers more than $3 billion. So it 
is still using the old recordkeeping and billing system designed in the 
1950's.
  Perhaps that is why when Money magazine hired 50 tax experts to 
prepare the return of a hypothetical typical American family it got 50 
different results. They found the Tax Code to be so vague, so 
confusing, so contradictory that, as Money's editor put it, ``The 
typical taxpayer has no way of knowing how much they actually owe.''
  Mr. President, it is time that Americans pay less taxes, not more. It 
is time Congress simplified the maze of regulations, penalties, 
deductions and credits that make compliance so difficult. And it is 
time we made it harder for the IRS to make hard-working Americans pay 
for its mistakes. That is why I have cosponsored the Taxpayer Bill of 
Rights 2.
  Among its more than 30 provisions, the Taxpayer Bill of Rights will 
waive interest charges when the IRS, not the taxpayer, is at fault. It 
will allow taxpayers to sue the IRS for up to $1 million for reckless 
or negligent collection actions. It will prohibit the IRS from issuing 
retroactive regulations.
  Yes, the era of big Government is over. So is the era of tax-and-
spend. For, as Calvin Coolidge also so accurately observed, ``The 
appropriation of public money is always perfectly lovely until someone 
is asked to pay for it.''
  He continues: ``I favor the policy of economy, not to save money, but 
to save people. The men and women of this country,'' he continues, 
``who toil are the ones who bear the cost of Government. Every dollar 
we carelessly waste means that their life will be so much more the 
meager. Every dollar that we prudently save means that their life will 
be so much more the abundant.''
  Mr. President, when Ronald Reagan was President of the United States, 
the portrait of Calvin Coolidge hung in a place of honor in the Cabinet 
room as one of the Presidents Mr. Reagan admired the most. Mr. Clinton 
has borrowed much from Ronald Reagan. Perhaps he would do well to 
borrow President Reagan's appreciation of Calvin Coolidge as well.

  Mr. President, I thank the Chair and yield the floor.
  Mr. COVERDELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, a moment ago, as we began this 
discussion, I outlined the impact of Government and regulations and the 
costs on an average family in my State. As I said, it comes to almost 
50 percent.
  I think it might be interesting, and I am going to yield in just a 
moment to my good colleague from Idaho, but I would like to make a 
point about what

[[Page S3260]]

has been the impact on this average family of this administration.
  On the Federal income tax liability, I said that we are currently 
paying $4,183, but if we had not put in place the policies of this 
current administration, that is, the largest tax increase in American 
history in August--that hot August--of 1993, then that tax burden would 
be considerably less. It would be $3,656.
  FICA would be $2,754 instead of $3,118. The regulatory costs, Mr. 
President, are considerably different, as well. They would be paying 
$5,892 instead of $6,615.
  The bottom line is that without the policies of this administration 
of taxing and growth and regulation, the total tax burden would have 
been $20,112 instead of $22,778 or, bottom line, this administration 
has added almost $3,000 of new costs to this average family.
  If you are making gross about $40,000 and you have a new $3,000 bill 
to send to the Government, it is a wake-up call. That is 15 percent of 
lost disposable income as a direct result of the policies of this 
administration. It is incredible.
  As I recall, during the debate we were only going to affect the 
wealthy. I do not believe any family making $40,000 a year considers 
themselves in the league of wealth, but their contribution--we remember 
that--the contribution that they would be asked to make is almost 
another $3,000 for every average working family in my State.
  Mr. President, I yield up to 10 minutes to my good colleague from 
Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, thank you very much.
  Let me thank my colleague from Georgia for yielding me time, but 
especially for taking out this special order on this very important day 
in the lives of every working man and woman in the United States, the 
day when your Federal taxes are due.
  I say that because it is also an important day for us to pause and 
recognize what paying your taxes means and the kind of impact that it 
has on us as a society. Obviously, my colleague from Georgia has spoken 
about how it impacts his State. And let me also congratulate him on his 
constitutional amendment to prohibit retroactive taxation. I am a 
cosponsor of that. I appreciate him leading in those areas something 
that our Founding Fathers were very, very clear on, while this 
Government seems to have been a bit confused on it.
  Also, today, the House, our neighboring body, will take up the two-
thirds majority to raise taxes as a requirement of our Constitution. 
Some would argue that is putting economics in the Constitution that 
should not be there. I disagree with that. I think it is the 
appropriate thing to do because, clearly, within the Constitution we 
have required two-thirds votes on other procedures that are required.
  Obviously, they are proposing an amendment today. That amendment 
requires a two-thirds vote. Somehow nobody suggests that that is the 
wrong thing to do or that is the wrong test that ought to be made. So I 
hope the House is successful today both in their debate and in their 
vote to require a supermajority to raise taxes. I think it is high time 
that we in this body and in the Congress of the United States become as 
sensitive to taxation as the taxpayers of this country that we suggest 
that we represent on a regular basis.
  My guess is that if you vote for increased taxes in this body, you 
are not representing taxpayers very well because the taxpayers of our 
country have consistently said for a long while that they are being 
overtaxed. A recent poll in the Readers Digest suggests that the 
average citizen believes that taxes ought to be no higher than about 25 
percent of their income, and they would even say in this poll that if 
somebody was paying 40 percent, even though they might be making more 
money, they were probably being taxed too much. Even the poorer of our 
society would suggest that those that are being taxed at a higher level 
ought to be taxed at a lower level because, for some reason, higher 
taxation was just blatantly unfair. I have to agree that that is the 
case.

  Today, as mentioned, is April 15. Americans will work until May 7 of 
this year just to pay their taxes. And, as we all know, that day just 
keeps increasing. I am talking about January 1 to May 7 of every year 
now for the average taxpaying working American to meet their tax 
requirement. If you went to work at 8 o'clock this morning, the first 2 
hours and 47 minutes of your 8-hour working day were worked just to pay 
your Federal tax requirement.
  Obviously, you live in another taxing district besides the Federal 
tax realm. You live in a State tax realm. Probably you would work 
another 35 minutes to an hour just to pay your State taxes. So it all 
adds up, and the average working person out there is going to spend the 
first 3-plus hours of their working day not putting one dime in their 
own pocket, not putting one dime to the purchase of a loaf of bread for 
the toast for the family breakfast, not putting one dime in the savings 
account that they are building to send their child to college, not 
putting one dime against the purchase of a new car or a new house, 
because for the first 3 hours, on the average, they will be putting all 
of those dimes either in the Treasury of the U.S. Government or the 
treasury of State government.
  That is why most every American agrees that they are overtaxed. That 
does not mean that Americans are antitax. I cited the poll a few 
moments ago where I think all Americans recognize the importance of 
some government, the importance of the basic services of government, 
and the need to pay for it, and the need to have budgets balanced. But 
what they cannot understand is why the average two-wage-earner family, 
a family of four, pays 38 percent of all of their income to pay taxes 
for all levels of government. It is simply too high, and we know it. 
And Americans know it more, I think, than we do.
  This last week during the Easter recess I had a rare privilege of 
taking my parents, who were here visiting, my wife and I to 
Williamsburg. I have been a student of Jefferson and Washington and 
Madison, as I hope many Senators have been on this floor. We visited 
the colonial capital of the colony of Williamsburg, better known as the 
House of Burgesses. Again, it was a remembering of why this country 
went through a revolution, why our Founding Fathers finally said, 
enough is enough, why they put their lives and their property on the 
line, simply saying they could not tolerate an oppressive Government, 
primarily because of the level of taxes that that Government was 
levying against a society of people who did not have a vote, who had, 
as we now know, taxation without representation.

  Of course, as mentioned in several of the books I have read about 
Thomas Jefferson, following the great revolution and a new country and 
an America under a Constitution in which we had representation, he was 
visiting in Europe and a British parliamentarian said, ``Well, you went 
to war because you had taxation with no representation. Now what do you 
think? You have got taxation with representation.''
  I think we all recognize by that statement and 208 years of history 
that central Government, if not controlled, can become oppressive, and 
the greatest tool of oppression on the rights and freedoms of an 
individual, of family, a working person, is the ability of Government 
to tax.
  Since this country instituted the income tax and since we instituted 
automatic withdrawal from our wages of the Government's share of those 
taxes, we all know that that 38 percent that gets taken out of the 
average family of four's salary, while it seems to go very easily and 
we forget about it being in or having been there, we fail to recognize 
the tremendous purchasing power that that would have or the additional 
freedoms that that could afford the individual family that is now taken 
away from them and, therefore, the freedom to choose, the freedom to be 
financially independent, the ability to make for themselves and their 
children a better life. All of that is part of why Americans become 
increasingly frustrated when they see a government that progressively 
adds taxes to their ability to earn money.
  In 1992, as we all know, President Clinton talked about a middle-
class tax cut. He was the champion during that Presidential year of 
wanting tax cuts for middle-income Americans. Somehow this President 
forgot or lost his way. We know what happened just a

[[Page S3261]]

year later, in 1993, when he pushed through the largest tax increase in 
the history of this country.
  Oh, I know argumentatively he played class-war politics by suggesting 
it would only go on the backs of the rich, but, as my colleague from 
Georgia has so clearly pointed out, it did not go on the backs of the 
rich; it went on the backs of everybody. It went on the backs of 
middle-income wage earners in his State of Georgia, in my State of 
Idaho. It hit all levels. And when it hits all levels, it hurts all 
levels of our economy and the ability of families today to make their 
own way.
  So we now have taxation with representation. But at the same time, 
what I think we, those who are the agents of representation, have 
failed to recognize is the real impact that taxes have on the ability 
of the wage earner to function for himself, herself, or for their 
family, or even the incentive in a society.
  You know, I talked about that first 2 hours and 47 minutes of work to 
pay the Government. If you decide you will not work that 2 hours, 47 
minutes because that money goes to the Government, think again. It does 
not work that way. What I am suggesting by that is that it has become, 
by increased rates of taxation, a blight on the ability of our economy 
to produce and the right of the individual to produce.
  Why can we not get above about 1.5-percent growth in our economy? 
Remember, growth is a factor of job creation, greater opportunity, 
upward mobility for wage earners starting at lower levels to move to 
higher levels, to provide for themselves and their families to have a 
better home, a better car, to seek a better education, to put a better 
coat on their back. If you deny growth in the economy, you deny those 
kinds of opportunities that have been historically true in our society.
  Taxation is a factor that puts that kind of blight against economic 
growth, dampers it down and, of course, as we all know in a society 
today, in an economy where we do not compete just with our neighbor 
down the street, we compete with our neighbor in China, our neighbor in 
Japan, if we and our level of taxation is not similar, certainly our 
ability to produce is less.
  I have talked about income tax and its impact on the family. If I 
could for just a moment move to something else that I think is grossly 
unfair, but it fits into all of this element of taxation. That is the 
issue of estate taxes. Somehow we have developed an attitude in our 
country, Mr. President, that if you collect wealth during your 
productive years, you work hard, maybe you do not work the 8-hour day, 
maybe you work the 12-hour day, maybe you work a 14-hour day and you 
accumulate wealth, you own a home free and clear, you have money in a 
bank, you have a savings account, you have stocks and bonds, you are 
not allowed to move those through to your children when you die, or not 
all of them.
  Again, the Government steps in and says, ``No, we will take that away 
from you.'' That is an estate tax that I have for so many years 
believed to be so wrong. I have watched farmers and ranchers in my 
State work for a lifetime to pay off a mortgage, to own something, only 
to sell it and find out that they have to give a high percentage of it 
back to the Government. Why? The Government did not earn it. It is not 
the Government's right to have it. Somehow that is something that our 
country has slipped into and something that April 15 of every year 
reminds me is just fundamentally wrong.
  I hope today is a day of reckoning, a day of better understanding. It 
appears I am out of time. Could I have an additional 2 minutes yielded 
to me?
  Mr. COVERDELL. The Senator is yielded 2 additional minutes.
  Mr. CRAIG. I hope today is a day of reckoning. Again, a time when we 
all awaken to the fact of what our Government does to us--not for us. 
There are many things that Government can do for us, but this is an 
instance where I believe Government takes too much of our money and 
spends it unwisely.

  That is why, along with the amendment that the House will be voting 
on today to require a two-thirds supermajority to raise taxes, why the 
amendment by my colleague from Georgia dealing with retroactivity in 
taxation, why the $500 tax credit that we have offered in our balanced 
budget bill that we sent down to the President, that he vetoed, is so 
important. Why trying to deal with a capital gains tax, trying to deal 
with an estate tax, reducing those rates, creating less impact on hard-
working, saving, earning Americans is what this day ought to be about.
  I thank my colleague, the Senator from Georgia, for leading Members 
in this important debate on this important day. I hope other colleagues 
would join with us and come to the floor, talking about how all of this 
impacts their States and their citizens' lives. It truly does. When you 
watch that kind of money, whether it is 38 or 40 percent that you earn 
being taken away from you for purposes that in many instances you find 
unnecessary, it is a question that that has to be on a monthly, daily 
basis, brought before this Congress.
  I thank my colleague from Georgia for bringing this matter to our 
attention.
  Mr. COVERDELL. Will the Senator yield?
  Mr. CRAIG. I am happy to yield to the Senator.
  Mr. COVERDELL. Mr. President, in my opening comments I was talking 
about an average Georgia family, and I alluded to the fact that 
virtually half their income has been absorbed by one government or 
another. You and the Senator from Tennessee have used the figure 40 
percent. I thought we might clarify that a bit.
  Would the Senator agree that a family's interest payments that are a 
direct result of our national debt should also be added into what is 
being taken from them?
  Mr. CRAIG. Absolutely. I think it is clearly the appropriate day to 
debate what is the total impact of our current Government's need based 
on net, based on taxation on the lives of the average citizen. When you 
do that, I think that is absolutely right. It gets well past the 40 
percent mark in many instances. You have to factor in, as I think you 
have, and when I talk abut 38 percent I am not factoring in State 
government in many instances, but you are doing so, I think, and that 
is a very important part.
  Mr. COVERDELL. Would the Senator also agree, the impact that families 
share of the regulatory costs, those have to be paid by that family, 
are also a factor that have to be weighed in as to what the total 
impact is on our working family?

  Mr. CRAIG. No question about it. That is something that you and I 
have struggled on for a good many years. We busily write an awful lot 
of laws around here with no sense of the kind of cost that it will have 
on the average citizen through regulatory compliance or making sure 
their businesses operate within the framework of those regulations. 
Those are real costs, and they get passed on to the consuming taxpayer, 
and ultimately that is a form of taxation.
  Mr. COVERDELL. I have enjoyed the Senator's remarks immensely, but I 
conclude by saying that in our colloquy, that the effect of all of this 
is that you have essentially removed half the earning wages of our 
working families, no matter where they are.
  I am reminded here, because it has been brought up several times, of 
a statement that the President made in a campaign commercial on January 
16, 1992, Mr. President. It said, ``I'm Bill Clinton, and I think you 
deserve a change. That's why I have offered a plan to get the economy 
moving again, starting with a middle-class tax cut.'' However, 1 month 
into his Presidency, that promise was dramatically altered. The message 
in the State of the Union speech that was made by the President on 
February 17, 1993, said, ``To middle-class Americans who have paid a 
great deal over the last 12 years and from whom I ask a contribution 
tonight.''
  Mr. President, that contribution turned into a $250 billion tax 
increase which resulted in every working family paying a lot more money 
to Washington and having a lot less in their checking account to take 
care of their own needs.
  The PRESIDING OFFICER (Mr. Craig). The Senator from Wyoming.
  Mr. COVERDELL. I yield 10 minutes to my colleague from Wyoming.
  Mr. THOMAS. I thank my friend from Georgia for organizing an effort 
to talk about something that we especially are aware of on tax day, on 
April

[[Page S3262]]

15, but certainly should be talked about every day. Unfortunately, I 
think not many of us often recognize the fact that nearly 40 percent of 
our revenue, of our income to our families, is taken in taxes.
  It has been talked about here today, that we work more than 3 hours a 
day out of our 8-hour day simply to pay taxes.
  Although I am quite sure that will not become the tax system, some 
believe--and perhaps there is merit in it--if we had this sales tax, we 
would be more aware of the level of payment that we make, where now 
much of it is withheld. We talk about our wages after taxes, and so it 
sort of disappears and fades off. So I think it is appropriate that we 
talk about it today.
  It seems to me that there are at least two important areas that need 
to be talked about. One, of course, is money--dollars. What does it 
mean to us and our family income? We probably ought to ask the 
question, of course, who should spend it? We work to support our 
families. Who should spend that money that we earn? Obviously, we would 
expect to be taxed if we want public activities to continue. Then we 
ask ourselves, how much is enough? How much should go? Is 40 percent 
too much? It seems to me that perhaps it is.
  Then, of course, there is a direct relationship between taxes and the 
amount of Government we have. It seems to me that is a principle we 
ought to talk about. Many of us believe--and I am one of those--we 
ought to have a limited Government at the Federal level, that we ought 
to, as it describes in the Constitution, do those things that are 
described in the Constitution and leave to the States and to the people 
those other activities. Taxes have a great deal to do with that.
  There is a relationship between the size of Government and spending. 
Of course, if we are responsible at all and we want to do this 
spending, then we should pay for it. That is where taxes come in. 
Unfortunately, we have not done that very well. We have wanted to do 
the spending, but we put it on the credit card for our kids. We need to 
change that, and we are in the process, hopefully, of doing it. The 
real measurement is not what Government can do for people but the kind 
of environment that can be set that allows people to do for themselves. 
So when we talk about taxes, we are also talking about the size of 
Government that we envision.
  I think we should talk about where we are now. As Paul Harvey says, 
``What is the rest of the story?'' We are beginning to hear a lot about 
how ``the deficit is down, the economy is up, and we are saving 
taxes,'' and so on. The fact is that Washington has never spent more on 
the Federal bureaucracy than we are and have under this administration. 
The fact is that we are spending less on defense, and that may be right 
or wrong. But it means we are spending more, then, in the nondefense 
areas, these programs that simply continue to grow. America's tax 
burden, State, Federal, and local combined, has never been higher than 
it is under this administration. It has never been higher as a 
percentage of GDP. Americans will pay more than one-half trillion 
dollars more in taxes as a result of the President's tax increase of 
last year.

  So despite what we hear and what we heard in the State of the Union 
Address on January 23, part of which said, ``We know big Government 
does not have all the answers''--I am quoting the President--``We know 
there is not a program for every problem, and we know we have to work 
to give Americans a smaller, less bureaucratic Government in 
Washington, and we have to give the American people one that lives 
within its means.'' He said, ``The era of big Government is over.'' 
Yet, we have the largest expenditure for Government that we have ever 
had under this administration.
  So, Mr. President, this is tax day. It has already been noted that 
the typical family spends more than 38 percent of its income on taxes--
more than it spends for food, clothing, and shelter combined. It has 
been mentioned that more than 3 hours of our 8-hour day is spent to 
produce taxes. It is also mentioned, I think importantly, that there 
are more than 100,000 employees at IRS, which is more than at the FBI, 
DEA, and Immigration Service combined. There is something wrong with 
that, when you take a look at the billions of dollars that are spent 
simply to prepare the forms that we have to use.
  It is also interesting, in terms of spending, that for every dollar 
in new taxes, the Government spends $1.59. The rest of it goes on the 
credit card. So what we have had, of course, is what we might call 
``the Clinton crunch.'' The President has promised a tax cut and 
delivered a tax increase, which is very difficult on small business, 
and it holds down the creation of new jobs. It is difficult for senior 
citizens on fixed incomes. There was a tax increase for everyone, among 
them a gas tax, which hits my State of Wyoming very hard. The new 
budget contains $60 billion in new taxes.
  So we have not moved toward the end of big Government. On the other 
hand, I think that in this session of Congress the majority party has 
made a real effort to do that. We passed tax cuts last year, a $500 per 
child tax credit, marriage penalty, capital gains tax, expanded IRA's, 
adopted tax credits, student loan interest deduction--all, of course, 
which was vetoed.
  Today the tax limitation amendment will be considered in the House. I 
happen to think it is a good idea. It is like saying we do not need to 
amend the Constitution. It is the same thing I heard when we were 
talking about a balanced budget amendment. Everybody stood up, and 
before they began to talk, they said, ``I want to balance the budget, 
but we do not need an amendment to do that.'' Maybe we ought to remind 
them that it has been 25 years since we balanced the budget. And 43 
States have that amendment. In my State, the legislature cannot spend 
more than it takes in. I think, similarly, we need that same kind of 
amendment on spending. There is no reason why, if spending is 
important, you cannot generate more support than 50 percent to do that.

  So, Mr. President, I think it is an issue we ought to talk about 
every day, and it is appropriate on tax day. Keep in mind, it is not 
only dollars. It is also how much Government do you want? I think that 
is a question that each of us, as citizens, ought to ask ourselves. 
Unfortunately, we do not have the kind of cost-benefit measurement in 
the Federal Government that we do at home. If the school district 
thinks they need a new school building or a sign, they say, ``Here is 
what it costs and here is what you have to pay,'' and you make a 
decision as to whether it is worth it. That is not what happens on the 
Federal level. We send in an amount of money, and we do not even know 
what it is really being spent for. We do not make any real decisions in 
terms of those programs that are funded.
  I am persuaded that we can have a much leaner Government and still 
provide for the things that most of us believe are necessary for the 
Government to perform. Remember, the measure of good Government is not 
what the Government can do for the people, but the kind of environment 
it sets so that we can do for ourselves. That is what the tax system, 
tax amendments, and being concerned about taxes is all about.
  I thank my friend from Georgia for organizing the time to talk about 
this important issue. I look forward to our doing something about it as 
a followup.
  I yield the floor.
  Mr. COVERDELL. Mr. President, I thank my colleague from Wyoming. He 
made an interesting observation. Not only did he talk about the effect 
of the tax increase of this administration, but he began to talk about 
the advantages that would have accrued to working families if the 
Balanced Budget Act that was sent to the President--which he vetoed--
had passed.
  A moment ago, I was talking about this average Georgia family paying 
almost $3,000 more because of the policies of this administration. The 
Senator from Wyoming reminded me that if the Balanced Budget Act had 
been signed by the President, the immediate effect to this average 
family would have been to return to their checking account $3,000 a 
year, or thereabouts. Here is a family making $40,000, and they would 
have $3,000 in additional income in their checking account--not on 
April 15 being shipped to Washington. Think what they could do with 
that. That is the equivalent of a 10- to 20- percent pay raise, Mr. 
President. It is not insignificant.

[[Page S3263]]

  Mr. President, I yield to the Senator from Iowa up to 10 minutes.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I thank the Senator from Georgia for his 
leadership on this very important day, April 15, the day taxes are due 
for American citizens. I appreciate the opportunity to discuss the 
issue of the high-tax policies of the President Clinton administration. 
The high-tax policies of this administration are policies toward the 
highest taxes in the history of the country. More money is coming in 
from taxes now than ever before in history, and of course, that money 
comes from the people.
  The tax bill which we find so burdensome is President Clinton's tax 
bill of 1993, which passed this body. But even all the Democrats would 
not vote for it, and there was a tie-breaking vote by Vice President 
Gore. The President's 1993 tax bill, OBRA 1993, was very 
controversial. President Clinton raised everyone's taxes by a record 
amount--again, the biggest tax increase in the history of our country.

  It also happens that the President had misgivings about his tax 
increase legislation. He was speaking in October of last year to the 
attendees at a Clinton fundraiser in Texas when he said that he thought 
that he raised taxes too much in 1993. I agree with the President.
  I want to remind everybody, as the Senator from Georgia does, of the 
various ways in which the President went about raising taxes at the 
highest level that they have ever been raised in one tax bill.
  He increased the tax on Social Security benefits. Some Americans have 
to report 85 percent of their Social Security income so it can be taxed 
again after they have already paid tax on it once.
  In addition, he added a new and higher income tax rate which also set 
the situation in order, which we call the marriage tax penalty, 
exacerbating it so that people are going to pay a lower tax living 
together than being married.
  He also added new and higher estate and gift tax rates.
  He decreased the business meals deduction for the truck driver and 
for the small business people of America. He hit farmers, truck 
drivers, and everyone who drives a car or truck with a 4.3-cent-per-
gallon increase in the gasoline tax.
  In Iowa--I do not know about the rest of the country--this Clinton 
gas tax costs every two-driver family an average of an extra $53.32 per 
year.
  For small business people, the President hosted a White House 
conference on small business. He waxed eloquently on the need for 
expensing deductions, for creating IRA's, for pension simplification, 
and for estate tax reductions, to name a few. But when Congress passed 
legislation on those very same issues, President Clinton vetoed not 
one, not two, but every one of those ideas that he spoke eloquently 
about at his conference.
  For education, he talked about a new tax deduction. But when Congress 
sent the President my new student loan interest deduction last fall, 
President Clinton vetoed it, again contrary to what he said he wanted 
to do. He even hurt families trying to relocate to new jobs by 
decreasing their deductible moving expenses.
  These, Mr. President, are just a few among many of the new, 
unpopular, and economically hurtful Clinton tax increases.
  The troublesome irony is that the President has many people still 
paying their extra 1993 Clinton income tax increases. People are still 
paying their 1993 income taxes because the President accomplished 
something that no other President had done before him. The President 
managed to raise taxes even before he was sworn into office because the 
tax rate increase of 1993 was made retroactive at his request.
  So those with the mind of softening the blow on people who would have 
to pay a retroactive tax increase insisted the President at least allow 
taxpayers to pay the retroactive portions of their 1993 taxes in three 
separate installments. The first installment was due in 1994. The 
second was due in 1995. And people just paid their third and final 
installment of their fiscal 1993 Clinton tax increase today, Monday, 
April 15, 1996.
  So, in October 1995, when the President testified in Texas at his 
fundraiser that he had raised people's taxes too much, perhaps he meant 
that he would feel their pain again on April 15, 1996. This is because 
today the President has given many taxpayers the unique opportunity to 
be taxed on income of three different years.
  Today many taxpayers will pay the last installment of their fiscal 
1993 taxes, the balance due on their now higher regular 1995 taxes, and 
their first quarter estimated taxes for 1996.
  Indeed, the only taxable year of the Clinton Presidency that 
President Clinton is not taxing this very day is 1994. Fortunately, Mr. 
President, no one is perfect. Even though President Clinton has done 
his best to raise taxes in a Democratic Congress, and to keep them just 
as high in a Republican Congress. He did this by vetoing efforts of the 
new Republican Congress to reduce taxes, particularly the tax deduction 
that gives a family of four with two children an additional $1,000 more 
in their pocket to spend.
  I believe that we should credit public servants for their good deeds 
and hold them responsible for their harmful ones.
  Apparently, President Clinton must love to raise taxes almost as he 
loves to deficit spend.
  Do not forget Mr. President, that he sent Vice President Gore to this 
very Chamber to cast that tie-breaking vote on the 1993 tax increase 
because even all the members of his own party would not go along with 
it. The voters remember it mostly because they are still paying for it, 
and will continue to pay for it every day.
  In addition, we passed last year a taxpayers bill of rights so that 
the taxpayer will not have to be intimidated by the IRS during audit, 
and the President even vetoed the taxpayers bill of rights.
  So, Mr. President, annually, this day April 15 brings to mind the 
complexities and the enormities of the Tax Code.
  April 15, 1996 of this year further serves to remind us of the 
dangerous precedent that President Clinton set with his 1993 tax 
increase, the biggest tax increase in the history of the country, and 
the only one retroactive to a period of time before the President was 
sworn into office.
  With his retroactive tax increase, President Clinton is the first 
President in the history of the Nation to have raised taxes before, 
during, and after his term of office. Of course, if we are not careful 
in the future, this may prove to be one of the most memorable and 
dangerous of the Clinton legacies.
  In addition to increasing taxes at the highest level in the history 
of the country with that tax bill of 1993, the President set in motion 
an economic situation in which money that would be invested for job 
creation has created less jobs than during the period when the country 
was recovering from the recession of 1991 to 1992 by some 3 million 
jobs.
  So, somewhere out there, even though we do have a high level of jobs 
being created, there are 3 million more people who could be employed if 
the tax increase of 1993 had not stymied the economy to the point that 
the people who create jobs were afraid to do it to the tune of 3 
million jobs.
  I yield the floor.
  Mr. COVERDELL. Mr. President, I appreciate the kind remarks of the 
Senator from Iowa.
  As a former native son of Iowa, I always enjoy listening to him 
address this Chamber.
  A moment ago, I was talking about the effect of the President's tax 
increase on the average citizen in our State, but just for the general 
record I think it worthwhile acknowledging what some of the impacts of 
that tax were. That tax increase created a 4.3-cent per gallon gas tax 
increase levied on all Americans. Once again, when we heard the debate 
to impose the tax increase, which was only passed by one vote, the Vice 
President casting the deciding vote here in the Chamber late in August 
1993, it was just supposed to affect the wealthy. But a 4.3-cent-gallon 
tax affects every farmer, trucker, every family, every carpool, every 
business--everyone. Under the provisions of that tax increase, senior 
citizens making as little as $34,000 a year--I guess that is another 
rich person--found their taxes hiked as a result of a 70-percent 
increase in the taxable portion of their

[[Page S3264]]

Social Security benefits. We all can hear people on the other side of 
the aisle talking about their concern for protecting Social Security 
benefits. One of the first things the administration did was to tax 
them.
  Small businesses were clobbered by the Clinton tax hike. More than 80 
percent of small businesses file their returns as individuals. As a 
result, small businesses were forced to pay the higher individual rates 
of up to 44.5 percent. I repeat, Mr. President, 44.5 percent. That is 
much higher than the 35-percent rate for big businesses. If you had to 
point to one sector of our society that was the most ravaged by that 
huge $250 billion tax increase, it would be small business. And this is 
the reason why. Because of paying taxes as individuals, they really got 
their marginal rate pushed up.
  As a result of Clinton's tax increase, the local hardware store in 
our State must pay a higher tax rate than a corporation like General 
Motors. Now, think about it. Most corporations in America, 60 percent 
of them, have four employees or less, and they were the fixed target of 
this tax increase. It was just like a Mack truck coming down the 
highway, bowling over them and left the situation where these smaller 
corporations are paying higher tax rates than, of all things, 
corporations like General Motors.
  The National Federation of Independent Businesses, the Nation's 
largest small business organization, called Clinton's tax increase 
``about as antismall business as you could ever see.'' That was 
published in the White House bulletin on June 18, 1993.
  I have focused a lot of my attention on the effect of taxes on the 
average family. I would like to visit that just a bit more, if I might.
  I have often referred to the quintessential average family in the 
1950's. I refer to the television family that we saw so often, ``Ozzie 
and Harriet.'' They were the picture of what we all thought the 
American family ought to be. At that time, Ozzie was sending to the 
Federal Government 2 cents--2 cents, Mr. President--out of every dollar 
he earned. If Ozzie were here today, he would be sending 24 to 25 cents 
out of every dollar to Washington.
  It is hard to envision or believe. When I was growing up, I was told 
that the single largest investment any American would ever make would 
be the purchase of a home. That is not true anymore. The largest single 
investment that any American or American family will make today is in 
the Federal Government, not the home.
  In fact, the Federal Government's consumption from the wages of this 
average working family equates to housing, food, and clothing combined. 
Who would have ever thought that working families in this country would 
be faced with this sweeping hand of the Federal Government coming 
through families and removing over a quarter of their income, removing 
more resources from the family than it took to build their home or buy 
their home or rent or to feed the family or to clothe it combined; that 
the Federal Government alone would come in and sweep more out of that 
family's checking account than all those fundamental functions we count 
on that family to do for America.
  I became very curious about this about a year ago because in the 
1950's the typical family had one parent working and one parent at home 
with the family, doing the business of raising the family. As you know, 
today that has been turned upside down.
  I mentioned a little earlier this average family in Georgia. It 
requires both parents to work. I got curious about that, and I wondered 
at what pace families started to have both spouses out in the 
workplace. If they had one in the workplace and one at home in 1950, 
just how quickly did it get to the point we are now where the majority 
of them have both parents in the workplace.
  So we tracked it on a chart from 1950 to 1990, the percentage of 
families for which both spouses were working. It is really interesting. 
If you take that line of the number of families where both spouses now 
work, as it grew over the last 40 years, and you take another chart and 
you map out the increases from the 2 cents to 25 cents that they are 
paying in taxes, those two lines are within 6 percentage points of each 
other all the way.

  What does that mean? It means that as the Government took more and 
more and more out of that working family, the Government was making the 
decision that for the family to keep fulfilling their needs in housing, 
education, et cetera, they had to send the second spouse out. And each 
year as that tax increase grew, many more families had to make that 
tough decision.
  It is incredible. There is no institution that has had a more 
profound effect on the behavior of the working family in America than 
the Government. It is not even Hollywood. We all talk about Hollywood 
and the violence in films, and I am sure that has had an effect, but it 
does not compare to the effect of the Federal Government taking more 
and more and more away from the family, leaving it with no option but 
to produce another worker, often even more.
  I said that those lines track each other; the number of working 
families that had to put both spouses in the workplace followed 
identically the increase in the tax burden. There is another way to 
look at it. How much had the tax burden increased over that period of 
time? It comes out about $10,000 to $12,000 per family. It is 
interesting that the average income of the second spouse is within 
$1,000 of the increased tax burden. In other words, we made the second 
spouse work so that they could pay the added tax burden. That is what 
they are doing in the workplace.
  Obviously, there have been other changes. There have been people who 
have made a choice about their careers. That is fine. But when you 
survey the second spouses in the workplace and ask them their choices 
about it, 85 percent would make a choice different than it is now. A 
third of them would not work at all. A third of them would work part 
time. And a third of them would direct their work at charitable 
activity instead of the necessity to be out in the workplace, just to 
pay Uncle Sam another tax bill so we can redistribute these resources 
from Washington. Back to the point I made a little earlier, Mr. 
President, we have a school of thought here that it is better for the 
wages to come to Washington because Washington can determine more 
effectively where those priorities for that family ought to be.
  That reminds me of a story that Senator Gramm, the senior Senator 
from Texas, often tells. He was in a debate in Texas with somebody from 
the Education Department and they were going back and forth about the 
priorities of education. Senator Gramm finally, in frustration, turned 
to the person and said, ``Hey, look, I love my children more than 
you.'' Whereupon the representative from the Education Department said, 
``No, you don't.'' And then Senator Gramm said, ``Well, OK, you tell me 
their names.''

  It is not a question of spending, it is a question of who is going to 
do it. Is the family more equipped to make these choices about 
education, housing, where to live, how to expend those resources? Or 
should we continue this idea of moving it up here so somebody who does 
not even know that family can be determining where those resources go?
  Mr. President, I am prepared to yield up to 10 minutes for the 
Senator from Mississippi.
  The PRESIDING OFFICER. The Senator from Mississippi is recognized.
  Mr. LOTT. Mr. President, I thank the distinguished Senator from 
Georgia for yielding me this time. I thank him for making arrangements 
to have this time to talk today about the tax burden on the American 
people. It is appropriate that we talk about this issue today, April 
15.
  When the poet T.S. Eliot wrote, ``April is the cruelest month,'' he 
had in mind something other than the income tax deadline of April 15, I 
am sure. But for most Americans, the middle of this month, despite all 
its beauty, is a time of resentment and disaffection. Over this past 
weekend, over the past weeks, maybe over the past couple of months, 
maybe even today, there are people all over America who are scrambling 
to try to figure out their ``simplified'' tax forms.
  That is always good for a laugh when I am home in Mississippi, 
speaking about how we developed simplified income tax return forms. 
They get more complicated every year. The average person is just not 
able to do it by himself or herself. It is a hodgepodge of 3 million 
words in the law and in regulations and requirements with regard to

[[Page S3265]]

our Tax Code. It is a mess. It is unfair. It is cumbersome. It is 
unmanageable. And something must be done about the tax burden on the 
American people.
  It might be argued that the tax burden on the American people is not 
all that great compared with some of the other countries around the 
world. But this is not other countries around the world. This is 
America. As a matter of fact, there are some countries that have a 
higher tax burden than us, others less. But I understand the average 
American pays about 37 to 40 percent of his or her income for taxes.
  Some of them obviously go much higher than that. It gets in the range 
of 50 percent or more when you figure all the taxes: Federal income 
tax, the FICA tax, the State tax, the local property tax--all the taxes 
that are heaped on the American people--even the cruelest of all, I 
think, the estate tax. That is one where we tax people's death. I 
wonder how we ever came to that, where we put American people in the 
situation where they worked all their lives to build a small business, 
perhaps they are third generation farmers, and when they die and they 
want to pass on their estate to their children, many times they wind up 
having to sell it because they cannot pay the taxes on this farm that 
has been in their family for many, many years. Or, because they cannot 
pay the taxes on the small business that they worked hard for, labored 
for, and built up, then they wind up having to sell it because of the 
tax burden.
  So, this is a cruel time. I understand, now, the average American 
also has to work until May 7 to pay the taxes that he or she owes. Way 
back in the beginning of this country it was only until January 31 that 
you had to work to pay the taxes for the year. Then it was February, 
March, right on through April. Now, average Americans work over 4 
months just to pay the tax burden that they are faced with today. 
Something must be done about this. There must be a way to have a fairer 
Tax Code. Changes should be made to make it more fair and changes 
should be made to provide, I think, overall basic reform.
  It is not that most of the American people do not want to pay any 
taxes. People understand they get a tremendous benefit from Federal 
Government, from State government. There are certain guarantees that we 
want. We do want the shores to be defended. We do have an obligation to 
support a strong national defense. We do need infrastructure. We do 
need the Interstate Highway System. There are some things the Federal 
Government can do to help with education. So there are some positive 
things that the Government can run, where it can be helpful, and we 
want that to continue.

  But I remember the days not so many years ago that most taxpayers 
signed their IRS returns with a kind of pride, a self-satisfaction 
that, by golly, you are getting a good deal, you are doing your part, 
you are pulling your weight. Sure we always griped about taxes and 
joked about them, but we knew that, while there was a price to be paid, 
there was some benefit that we all basically supported coming from 
that.
  I believe that has changed in many respects now, and not for the 
better. With a steady expansion of Government, both at the State and 
Federal level, the percentage of family income going for taxes has 
grown tremendously. For most households today, taxes are the largest 
single outlay in their budgets. I hate to think how many families now 
have two earners these days, both mom and dad, in order to compensate 
for the lost income siphoned off by official Washington. That is why 
the Republican Contract With America last year promised tax relief for 
families. That is why majorities in both the House and the Senate 
translated the contract's promises into carefully crafted legislation.
  We all know what happened to it. Tax relief for families with 
children was vetoed by President Clinton, along with many other revenue 
provisions that would have curbed Washington's appetite for the 
public's earnings. Today, April 15, is an appropriate time to remember 
that outcome and to consider why it occurred. It happened because there 
are still too many elected officials who believe they know best how to 
spend the people's money. They believe that big Government can take 
care of families better than they can take care of themselves and of 
their children. And it takes cash, hundreds and hundreds of billions of 
dollars to do that, if you are going to let Washington look after all 
these problems.
  That attitude is fading fast over most of the Nation. I found it is 
fading, certainly, in my home State while I was home during the Easter 
recess break. But it persisted in many high places here in this city. 
Only in official Washington is it called a tax expenditure when you 
allow people to keep their own money. That was a bit of ingenious 
wordsmithing, some few years ago. I think it really started in the 
1970's, when we started calling it a tax expenditure. Only inside the 
beltway is a tax cut considered a loss. Only within the shrunken ranks 
of Federal dogmatists is broad-based tax relief called a tax cut for 
the rich.
  It is almost as if the opponents of tax reduction disbelieve in the 
American dream of hard-earned success. It is as if they think people 
who strive and contribute are bad, while those who depend on Government 
should be encouraged to stay that way. More than any other factor, I 
believe that attitude, that set of ideological blinders, accounts for 
last year's opposition to the tax provisions of our Contract With 
America.
  Let me just mention, again, the major provisions in that tax package 
that we considered last year, but the President vetoed. We eliminated 
the marriage penalty. How many years have we been talking about how it 
is unfair, when a young couple--or couple, not even necessarily young--
gets married, if they both work, when they get married they pay more 
taxes even though their income does not go up? There is nobody who can 
defend the marriage penalty.
  How about the spousal IRA? Why is it that the only group in America 
that cannot have an IRA is a spouse working in the home? Should we 
allow that? Should we encourage the spouse in the home to be able to 
save a little bit for his or her retirement days? Absolutely we should 
do that.

  Another thing that we included in that tax package was relief for our 
seniors who still want to work. We would raise the limits on the 
earnings that you can have and still get Social Security. Why should 
people just between 65 and 70 lose part of their income if they make 
over $11,500 a year? Thank goodness we have now passed separate 
legislation to do that, but that is another example of what was 
included in our package.
  Certainly, we should provide families the $500 tax credit if they 
have children. Some people argued, ``Oh, what difference would it make 
to a family with one or two children?'' Let me tell you, in my State, 
for a couple making $30,000 a year with two children, a $1,000 tax 
credit would make a significant difference, and then they could decide 
what their children needed most instead of the Federal Government.
  Finally, and not least, it did provide a capital gains tax rate cut. 
If you are going to reduce the deficits, you can only do it by three 
ways fundamentally: by controlling spending, by raising taxes or, 
hopefully, by doing some things with Government and regulatory relief 
and by changing the Tax Code to provide growth in the economy. The 
capital gains tax rate cut would do that.
  In my State of Mississippi, if we cut the capital gains tax rate on 
timber and on timberlands, there would be an explosion of activity in 
the turning over in the timber area. It is probably the biggest 
industry we have in our State. Yet, people are hesitant to sell that 
timber, to sell that land because so much of it is taken in capital 
gains. It is just, basically, not fair.
  So those are the things we had in our tax package last year. It would 
have provided some relief to families with children and to individuals 
when they are newly married and to a spouse working in the home. Tell 
me that is helping one group over the other. That helps everybody.
  Our tax package was not a giveaway to the rich. It was a give-back to 
hard-working people, and there is a big difference. If President 
Clinton had signed, instead of vetoed, the Republican tax package last 
December, 88 percent of its tax relief would have gone to families with 
incomes under $100,000 and 72 percent would have gone

[[Page S3266]]

to families with incomes under $75,000. That is certainly not rich. 
That is families in which both husband and wife are maybe 
schoolteachers. It is a family whose sole breadwinner is perhaps an 
auto worker in Detroit or a shipyard worker in Pascagoula, MS. It is 
the self-employed, heads of households. It is the men and women 
starting up small businesses. It is the parents who could well use that 
$500 tax credit for their children, which was all vetoed by the 
President. After all, in the private sector, this $500 can go a long 
way toward clothing, food, and education of our children.
  The hopes of those middle-income taxpayers were splattered by ink 
with that veto last year. But they should not give up hope. There is 
still an opportunity for this Congress this year to make some needed 
changes in our Tax Code that will help middle-income Americans and 
others, also.
  But now to the heart of the matter. Just what is the price that has 
been paid?
  Mr. President, I ask the distinguished Senator from Georgia if he 
will yield me just another minute to finish up.
  Mr. COVERDELL. I will be glad to yield another minute to the Senator 
from Mississippi.
  Mr. LOTT. Mr. President, why could the President and his allies not 
accept tax relief for the American people? The answer is profamily, 
progrowth tax reform puts a crimp in Government spending. If you allow 
the people to keep more of their money, it is a little less the 
Government would have had to gobble up and to spend. It makes it harder 
for practitioners of business as usual around this institution to 
provide favors to their constituents. It slows down the Government 
spending machine.
  That is why most Americans have paid more in Federal taxes than they 
should have paid. Big government in Washington needed their money to 
stay big and to grow bigger. I really believe that by giving some tax 
relief to the people, in many instances--in fact in most instances--you 
can actually wind up getting more revenue coming into the Government 
because the people are given more incentives to work hard, keep their 
own money, pay taxes, and everybody benefits from that.
  As of midnight tonight, tax year 1995 will be history. It is maybe 
too late to lessen the burden on that year, on the past, but we can, 
indeed, do something about the future in the hope that on this same day 
next year, taxpayers will be able to celebrate the tax give back that 
they so justly deserve.
  Mr. President, I yield the floor.
  Mr. COVERDELL. Mr. President, I appreciate the remarks of the Senator 
from Mississippi, as always. I am going to yield our time until 1 
o'clock to the Senator from Arizona, with this logistical comment: If 
the senior Senator from Georgia has not arrived at 1, I will ask 
unanimous consent to extend our time another 10 minutes so that the 
Senator from Arizona will have sufficient time to complete his remarks. 
I think we can achieve that. I will not know until 1 o'clock.

  The PRESIDING OFFICER (Mr. Thomas). The Senator from Arizona.
  Mr. KYL. Mr. President, I begin by thanking the Senator from Georgia 
for conducting this particular discussion on tax policy on this day, a 
day which we might paraphrase will live in infamy at least in the lives 
of many Americans. By midnight tonight, millions of Americans will have 
completed their tax returns and may agree with T.S. Eliot who 
characterized April as the cruelest month of all. I am not sure this is 
what he had in mind, but perhaps it applies.
  According to estimates by the Internal Revenue Service, individuals 
will have spent about 1.7 billion hours on tax-related paperwork. 
Businesses will have spent another 3.4 billion hours to comply with 
their Tax Code preparations this year. The Tax Foundation estimates 
that the cost of compliance will approach $200 billion.
  If that is not evidence that our Tax Code is one of the most 
inefficient and wasteful ever created, I do not know what is. Money and 
effort that could have been put to productive use solving problems in 
our communities, putting Americans to work, putting food on the table, 
or investing in the Nation's future are instead devoted to wasteful 
paperwork.
  It is no wonder that the American people are frustrated and angry, as 
I found in the townhall meetings and other visits with constituents in 
the last 2 weeks in Arizona. They are demanding real change in the way 
their Government taxes and spends.
  There are, of course, a number of proposals that have been generated 
for comprehensive tax reform. Senator Richard Shelby and House Majority 
Leader Dick Armey have proposed a flat tax. Versions of the flat tax 
have also been suggested by Steve Forbes and Senator Phil Gramm. Former 
HUD Secretary Jack Kemp has issued a report at the request of Speaker 
Gingrich and Majority Leader Dole which recommends a single rate 
simpler tax system. The chairman of the House Ways and Means Committee 
has recommended that the income tax be pulled out by its roots and 
replaced with a national sales tax. Senator Lugar has proposed a sales 
tax as well.
  The Senate Judiciary Committee just concluded a hearing on a proposal 
to change whether we move to some version of a flat tax or sales tax or 
some other alternative. Indeed, it is a change that should be made 
whether comprehensive tax reform occurs or not. I am talking about a 
change that requires a two-thirds vote in both the House and Senate in 
order to approve tax increases. The House of Representatives is 
scheduled to vote on its proposal later on this evening.

  The tax limitation amendment it is called. The tax limitation 
amendment, which I proposed in the U.S. Senate, with the support of 20 
other Senators, would require a two-thirds vote of approval in both the 
House and the Senate in order to increase the tax base or to increase 
any tax rate.
  The two-thirds supermajority that many of us believe should be added 
to the U.S. Constitution was recommended by the National Commission on 
Economic Growth and Tax Reform, as I said, appointed by Senate Majority 
Leader Dole and Speaker Gingrich and chaired by former HUD Secretary 
Jack Kemp who testified at this Judiciary Committee hearing this 
morning, along with former Governor of Delaware Pete du Pont and a host 
of other experts on tax policy.
  This Commission that Secretary Kemp chaired advocated the 
supermajority requirement in its report on how to achieve a simpler 
single tax rate to replace the existing maze of tax rates, deductions, 
exemptions, and credits that make up the Tax Code as we know it today.
  In fact, in the words of the Commission, and I am quoting:

       The roller-coaster ride of tax policy in the past two 
     decades has fed citizens' cynicism about the possibility of 
     real, long-term reform, while fueling frustration with 
     Washington. The initial optimism inspired by the low tax 
     rates of the 1986 Tax Reform Act soured into disillusionment 
     and anger when taxes subsequently were hiked two times in 
     less than 7 years. The commission believes that a two-thirds 
     super-majority vote of Congress will earn Americans' 
     confidence in the longevity, predictability, and stability of 
     any new tax system.

  That is the end of the quotation from the Kemp Commission report.
  In the 10 years since the last attempted comprehensive tax reform, 
the Congress and the President have made some 4,000 amendments to the 
Tax Code--4,000 amendments. In the future, without the protection of 
the tax limitation amendment, taxpayers will be particularly vulnerable 
to tax rate increases, particularly if the tax reform eliminates many 
of the deductions and exemptions and credits in which they sometimes 
find refuge today.
  In short, Mr. President, the tax limitation amendment will make it 
more difficult for Congress to raise taxes, and it will also help 
restore confidence, stability, and predictability to the Tax Code.
  Mr. President, I have more of the statement which I would like to 
present. I wonder if, in view of the hour, it would be appropriate for 
the Senator from Georgia to ask for an extension of time.
  Mr. COVERDELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. I ask unanimous consent that our side be granted an 
additional 10 minutes.
  The PRESIDING OFFICER. Is there objection? Hearing none, without 
objection, it is so ordered.
  Mr. COVERDELL. Mr. President, I yield an additional 5 minutes to the 
Senator from Arizona.

[[Page S3267]]

  Mr. KYL. I thank the Senator from Georgia.
  Ideally, Mr. President, the tax limitation amendment would be put 
into place after comprehensive tax reform is accomplished. This is 
because tax reform necessarily aims to broaden the tax base, 
eliminating the maze of deductions and exemptions and credits that make 
up the Tax Code today, and then apply one low tax rate to whatever 
amount of income is left. So a two-thirds majority vote requirement 
would make comprehensive tax reform more difficult.
  I would note parenthetically that the Tax Reform Act of 1986 would 
have met the two-thirds test because it passed both the House and the 
Senate with more than a two-thirds majority. So advocacy of tax reform 
is not necessarily a reason to oppose the tax limitation amendment at 
this time. But in any event, it is important that this debate begin 
now, Mr. President, because of course, constitutional amendments such 
as this are going to take a long time to get adopted.
  It probably will not be approved this year in the House or the 
Senate. It would require a two-thirds vote in both the House and 
Senate, and then three-fourths of the States to approve it. So the last 
thing I am worried about is that we will accomplish this constitutional 
amendment before we accomplish fundamental tax reform. I think we need 
to begin the debate now on the constitutional amendment, and by the 
time we get finished with fundamental tax reform, perhaps the 
constitutional amendment can then be put in place to make it difficult 
thereafter to change the Tax Code.

  I think it is also important to make three other quick points. First, 
the tax limitation amendment cuts no taxes. It only raises the bar on 
passing future tax increases. Many people, including myself, already 
believe that taxes are far too high. This amendment in effect says, 
``Enough is enough.'' It makes Congress find a way to meet its 
obligations without taking more from the pockets of the American 
people.
  Understand that the average family today pays more in taxes than it 
does on food, clothing, and shelter combined. I would refer you to the 
chart, Mr. President, entitled ``Family Budget 1995'' in which you can 
see the amount spent on savings; recreation; transportation; medical 
needs; then food, shelter, and clothing; and then, finally, Federal, 
State, and local taxes. We pay more in Federal, State, and local taxes 
than we do on food, shelter, and clothing all combined. Clearly, this 
tax burden on the average family is too high.
  Let me also note that it has obviously been fairly easy for Congress 
to raise taxes. Here is the Federal tax burden per capita just in the 
last 15 years, the years 1980 through 1995. You can see that in 1980 it 
was about $2,286 per capita. Today it is over $5,000 per capita. 
Clearly, it is not hard to raise the tax burden on taxpayers. We need 
to make it harder.
  If you want to look at the macrochart, the chart that shows the 
Federal Government revenues from taxes since 1950, look at this chart. 
It clearly shows that tax increases have skyrocketed. It is not hard to 
raise taxes. It is too easy to raise taxes. That is why we need a two-
thirds supermajority to raise taxes. What the tax limit amendment says 
is that it ought to be harder to raise taxes, that we are already 
taking too much from working American families and therefore we ought 
to take less.
  I also note that our Constitution already provides several--10 
specifically--supermajority requirements. My guess is that that is 
because the Framers wanted a consensus to be developed to make really 
important changes. That is why it takes a two-thirds vote to override a 
President's veto, for example. My guess is the Framers would say today 
this is out of control. It is important enough that a broader consensus 
than a mere simple majority should be required in order for us to raise 
taxes.
  Mr. President, there is no small irony in the fact that it will take 
a two-thirds vote for us to cut taxes since the President has vetoed 
our tax cut proposal and yet the largest tax increase in the history of 
the country in 1993 was passed not even with a majority, technically, 
because the Senate vote was tied 50 to 50, and it took the vote of the 
Vice President to break that tie.
  It ought to be as hard to raise taxes as it is to cut them. The 
amendment will make it harder to raise taxes. That is the point. I know 
that is the objection of the opponents, but that is the whole point 
here. I think we would all agree that a lower tax rate would be more 
beneficial, not only for the American family, but for our economy. As a 
matter of fact, lower tax rates, research shows, results in more 
taxable income, more taxable transactions, and eventually more tax 
revenues to the Treasury. So we actually are benefited by reductions in 
tax rates, not increases in tax rates.
  The tax cuts of the early 1980's are a case in point. They spawned 
the longest peacetime economic expansion in our nation's history. 
Revenues to the Treasury increased as a result--from $599.3 billion in 
fiscal year 1981 to $990.7 billion in fiscal year 1989, up about 65 
percent.
  High tax rates, on the other hand, discourage work, production, 
savings, and investment, so there is ultimately less economic activity 
to tax. That is precisely what Martin Feldstein, the former chairman of 
the President's Council of Economic Advisers, found when he looked at 
the effect of President Clinton's 1993 tax increase. He found that 
taxpayers responded to the sharply higher marginal tax rates imposed by 
the Clinton tax bill by reducing their taxable incomes by nearly $25 
billion. They did that by saving less, investing less, and creating 
fewer jobs. The economy eventually paid the price in terms of slower 
growth. So increases in tax rates do not usually translate into more 
tax revenue.
  It is interesting to note that revenues as a percentage of gross 
domestic product [GDP] have actually fluctuated around a relatively 
narrow band--18 to 20 percent of GDP--for the last 40 years. Revenues 
amounted to about 19 percent of GDP when the top marginal income tax 
rate was in the 90 percent range in the 1950's. They amounted to just 
under 19 percent when the top marginal rate was in the 28 percent range 
in the 1980's. Why the consistency? Because tax rate changes have a 
greater effect on how well or how poorly the economy performs than on 
the amount of revenue that flows to the Treasury relative to GDP.
  In other words, how Congress taxes is more important than how much it 
can tax. The key is whether tax policy fosters economic growth and 
opportunity, measured in terms of GDP, or results in a smaller and 
weaker economy. Nineteen percent of a larger GDP represents more 
revenue to the Treasury and is, therefore, preferable to 19 percent of 
a smaller GDP.
  Requiring a supermajority vote for tax increases is not a new idea. 
It is an idea that has already been tested in a dozen States across the 
country. In 1992, an overwhelming majority of voters in my home State 
of Arizona--72 percent--approved an amendment to the State's 
constitution requiring a two-thirds majority vote for tax increases.
  There is a reason that the idea has been so popular in Arizona and 
other States. Tax limits work. According to a 1994 study by the Cato 
Institute, a family of four in States with tax and expenditure limits 
faced a State tax burden that was $650 lower, on average, 5 years after 
implementation than it would have been if State tax growth had not been 
slowed.
  The tax limitation amendment will force Congress to be smarter about 
how it raises revenue. It will force Congress to look to economic 
growth to raise revenue, instead of simply increasing tax rates. It 
will protect taxpayers from additional tax increases.
  We are going to have to confront this issue of raising taxes sooner 
or later because the burden on the American family is simply too high. 
It seems to me this is a good time to do it. Starting this debate on 
tax day, April 15, is a propitious time when people's attentions are 
focused on the issue. I hope that the House of Representatives later 
today approves the tax limitation amendment pending there. I hope that 
Leader Dole will be able to schedule this amendment sometime soon on 
the Senate floor for a vote here.
  I appreciate the chairman of the Judiciary Committee making time 
available for our hearing this morning. It was an informative hearing 
which certainly sustained the case that the time

[[Page S3268]]

for a tax limitation amendment is upon us and an amendment that would 
make it hard to raise taxes by requiring a two-thirds vote in both the 
House and the Senate.
  Mr. President, again, I commend the Senator from Georgia for making 
this time available. I hope that we can get on with this prospect of 
making Americans' lives a little bit easier by taking less of their 
hard-earned income.
  Mr. COVERDELL. I thank the Senator from Arizona. Mr. President, how 
much time remains?
  The PRESIDING OFFICER (Mr. DeWine). The Senator from Georgia has 5 
minutes.
  Mr. COVERDELL. Thank you, Mr. President.
  I want to commend the Senator from Arizona for his legislative 
efforts to make it only possible to pass new burdens on the American 
people with a two-thirds vote. I think there should be an extra burden 
on any legislative chamber before it has the right to pass on even 
greater burdens.
  We have spent the entire morning here talking about the size of the 
burden which is just--I am convinced, if any of our Founders were here 
today, Jefferson in particular, they would be absolutely stunned at the 
scope of the amount of wages that a laborer must forfeit to the 
Government. He said we needed a frugal Government which did those 
things that absolutely had to be done, but other than that, the fruits 
of labor should be left to those who earn it, and allow them to choose 
their own pursuit of happiness.
  We have talked a lot this morning about the scope of the tax increase 
this administration put on the American people. The effect and burden 
it added, in our case, is almost $3,000 for the average family annually 
that they are having to forfeit from their wages, preventing them from 
doing the things they ought to do.
  But I want to close with one piece that is particularly egregious 
about that tax increase. That tax increase which was passed in August 
1993 changed the Tax Code backward even beyond the administration 
taking office. For the first time in history, it changed the Tax Code 
all the way back into a former administration, the Bush administration, 
January 1993.

  Mr. President, the Russian Constitution does not allow you to tax 
retroactively. It is wrong. It is morally incorrect. Families and 
businesses and communities have to know what the rules of the road are. 
They have to be able to plan their lives, plan their families, plan 
their tax burdens in advance. They cannot get to the end of the year 
and have a Congress of the United States and President come forward and 
say, ``Whoops. We're changing all that to take effect back a year 
earlier. So all your planning was for naught. We don't care.''
  Mr. President, that is wrong. When I leave this Chamber, I will be 
going to a hearing on a constitutional amendment which I and others are 
sponsoring that, like the Russians', would prohibit Americans from 
being subjected to retroactive taxation.
  Whenever I speak to any American group--it does not matter where they 
are, my State or any other--and you talk about retroactive taxation, 
there is a unanimity that that is wrong. Our Government has all too 
frequently in current years gotten into the business of changing the 
rules midstream. It has had a very deleterious effect on the planning 
of our families, planning for our businesses, particularly small 
businesses.
  This retroactive tax that was dumped on the American people by the 
President's last tax increase, I believe, is horribly wrong, and has 
had a terribly negative impact. We ought to do everything we know to do 
to assure that it never happens again--not in the United States of 
America.
  I yield back any remaining time.

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