[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Senate]
[Pages S2803-S2805]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 TAXES

  Mr. THOMAS. Mr. President, several of us have asked this morning for 
a half hour to talk about an item that is of particular interest now, 
and that is taxes. It is of particular interest because we are now 
close to April 15, when taxes are more real to us all than they are at 
some other times. We want to talk about taxes because they are part of 
the Republican agenda. We have talked, over the years, about the idea 
of allowing families to spend more of their own money, allowing 
businesses to be able to invest and create jobs in the private sector. 
I think it is appropriate to talk about taxes because it has been an 
area of controversy--the idea of whether or not we ought to have an 
effort at tax relief at the same time we seek to balance the budget.
  Mr. President, I am here to tell you that having been in my home 
district in Wyoming over the past week, as most of us have, and having 
a series of town meetings, the issue that came up most often is: What 
are you going to do

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about taxes? What are you going to do about the capital gains tax? What 
are you going to do about estate taxes or some tax relief for families 
to be able to help take care of their own children?
  So I feel very strongly about it. Let me just say that too often when 
we talk about taxes and the budget, I think it seems that we are 
talking about arithmetic and bookkeeping when we talk about budgets. It 
just seems to me that when we talk about budgets, we are really talking 
about something quite broader than that, and that is the direction of 
this Government and whether or not we want to have more central 
Government, or whether we want to have less, whether we want to move 
more of our activities back closer to people at the State and local 
governments, or whether we want to continue to build up more and more 
at the central Federal Government level.

  With that concept, the philosophical direction that is inherent in 
those decisions is also a decision about taxes and, I suspect, if 
possible, although we haven't done it for 30 years, to balance the 
budget and to continue to spend at the same time. You do that by 
raising taxes. That is the way you do that. That is what the President 
did several years ago, to move toward a balanced budget by continuing 
to spend but to raise taxes.
  There is a philosophical difference of view. There are those who 
believe that we ought to have more Government, who believe that the 
Government actually spends money to a better advantage than people 
themselves do, who believe that we ought to have more and more 
functions carried on at the Federal level in the central Government. 
That is a legitimate point of view. I don't happen to share it.
  I think, Mr. President, that quite often when we talk about the 
details of issues, really at the center of it is that issue of whether 
you want more Government or whether you want less. It is a pretty basic 
philosophical issue. That is what we are talking about here. It does 
seem to me that--No. 1, when you have a tax burden on the American 
citizens that averages between 38 and 40 percent in taxes for families, 
that is a heavy burden. That is a very heavy burden.
  It seems to me, of course, that there are lots of ways in which we 
can reduce the size of the Federal Government. We can contract, we can 
have more things done in the private sector, and we can move more of it 
to the State government. There are a lot of the things out of the $1.7 
trillion budget we don't have to do. Many of those things have been 
there forever and they just go on because they go on. I guess I am 
suggesting that we ought to take a long look at that budget. In my 
view, one of the priorities for this Congress and for this Senate ought 
to be to balance the budget and provide tax relief for American 
citizens. That is what it is all about, I believe, so we want to talk 
about that.
  There is a different view. There are those who, I think legitimately 
from a strategic point of view, say, ``Let us balance the budget 
first.'' That is OK, I guess, if you are committed then to doing the 
tax relief. However, I believe we ought to deal with them at the same 
time. I am one who signed a letter--there were 16 of us, I believe--to 
the leader saying that we ought to deal with the whole concept of the 
size of the budget, how we balance the budget and how we give tax 
relief to American families and to business. That seems to be what we 
ought to do.
  What did I hear about at home? I heard about capital gains taxes. I 
heard an awful lot about the idea that people would like to be able to 
invest in businesses if they could make some profit over time, even if 
it is nothing more than inflation over time, and about paying taxes on 
the investments for the inflation they have made. That discourages 
them. We have a lot of small businesses in my State, as is true 
everywhere. Small business is the backbone of this economy. We have a 
lot of farmers and ranchers and families who have spent their whole 
lives putting together an estate in their ranch or farm. Now we find, 
quite often, because those are not really cash-flow cows--there is a 
great deal of asset value there, but not much cash--you have to dispose 
of that property in order to pay the taxes. You can't pass it on to 
your family. There is a lot of concern about that.
  Well, Mr. President, I have been joined by several of my associates 
to talk for a little bit about taxes this morning. So I yield to my 
friend, the Senator from Arkansas.
  The PRESIDING OFFICER. The Senator from Arkansas is recognized.
  Mr. HUTCHINSON. Thank you, Mr. President, and I thank the Senator 
from Wyoming for yielding time and for organizing this time to talk 
about the desperate need for tax relief for American families and 
businesses. I rise today in very strong support for meaningful and 
permanent tax relief for American families and businesses. This is, I 
believe, no time for us as conservatives, no time for us as 
Republicans, no time for us as Americans to retreat or backtrack or to 
equivocate on our commitment to the American people that we will fight 
for them and fight for tax relief.
  One of the problems--and there are many--with the President's budget 
is that he matches temporary, very narrowly targeted tax cuts with 
permanent tax hikes. So while the minimal targeted tax cuts would be 
sunsetted, the American people will be obliged to continue to pay and 
pay and pay the tax increases. Not too long ago, Mr. Greenspan, 
Chairman of the Federal Reserve, testifying before the Senate Banking 
Committee, said, ``Ultimately, you cannot solve the long-term deficits 
from the receipt side. It's got to be from the expenditure side.''
  Put very plainly, it seems to me that Mr. Greenspan is saying that 
the problem we have in our chronic deficits is not that the Federal 
Government does not have enough money, it is not that our National 
Government does not have enough revenues; it is that we are, in fact, 
addicted to spending. So the question is--and the debate continues to 
exist--Can we balance the budget and provide tax relief simultaneously? 
I think the answer to that is an emphatic, yes. The problem is not that 
we don't have enough revenues or that we need to increase taxes. The 
problem has been and continues to be that we spend too much and that we 
cannot get a control on our spending habit and that we are unwilling to 
deal with the very real problem of entitlement spending that consumes 
more and more of the budget pie.
  So I suggest that we can cut taxes and that we must cut taxes for the 
American people. There are three areas, I think, particularly that we 
need to emphasize. First, as the Senator from Wyoming emphasized, was 
family tax relief. Families today, working families, hard-working 
families, are being squeezed more and more by an ever larger tax bite--
almost 40 percent for the average family--at the Federal, State, and 
local level, which is more than they are spending for housing, for 
education for their children, for health care, more than they are 
spending for recreation, all combined together, they are spending to 
the tax collector. That is too much. That is unfair.
  I also was listening to my constituents over the recess. We had 12 
town meetings in Arkansas. In Fayetteville, AR, after making a speech 
and taking questions for more than an hour, a gentleman came up to me 
and said, ``Senator, something is wrong in America.'' He said, ``I was 
raised in a family of eight of us. There were eight children. Mom 
stayed home, dad worked. Dad, as a single breadwinner in a single-
income family, he could provide for the eight of us. We had a pretty 
good life. My dad had a high school education. Now I have a college 
degree, two children. My wife and I both work, and we can barely keep 
things together. Something is wrong.'' While there may be many, many 
answers to that question, what is wrong and what has happened--a big 
part of it--is that Government has gotten larger, and as Government has 
gotten larger, its demand on the family has increased and the amount 
that it confiscates from the American family of higher taxes has grown 
to the point that the American family has a very difficult time paying 
it.

  We need family tax relief. We need estate tax relief. There are fewer 
things I heard more about during my town meetings than the need for 
estate tax relief. There are fewer taxes in this country I believe that 
are more un-American than the estate tax. There are fewer taxes that 
are more of a killer and a destroyer of the American dream than the 
estate tax.
  We used to say that part of the American dream is if you work hard,

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save your money, and if you invest well, that you not only will have a 
better life, but you will be able to pass that on to your children and 
grandchildren so that they will have greater opportunities than we 
have. But today, if you work hard and if you have done well, we will 
take 55 percent of it in estate taxes. It is killing that American 
dream, or a big part of that American dream. I think that is wrong.
  There are five bills in the Senate to reform or to eliminate the 
estate tax. I am on all of them. I think we need to at least raise the 
exclusion. But better yet, we need to eliminate it. It is a very 
ineffective way to fund the Federal Government anyway. We are 65 cents 
short in collections for every dollar that we receive from the estate 
tax. It is a very ineffective way of funding Federal programs.
  Then, finally, I want to mention that we desperately need immediate 
capital gains tax relief. I heard a great deal about this. This is what 
they say. They say, yes, the Republicans are for capital gains tax 
relief, that it is a tax break for the wealthy. Well, we know that the 
vast majority of tax filers will at some time in their life file 
capital gains on their tax returns, most of those being middle-income 
earners. It is not a tax break for the wealthy.
  Let me tell you how it plays out in Arkansas. A young couple started 
30 years ago building a poultry farm in the Ozark Hills. They spent 
their life paying off that mortgage. They are getting up in age. They 
are not wealthy. But they have worked their whole lives to pay off that 
farm. Maybe they can no longer tend that big farm, or maybe they want 
to move into town close to the hospital, or maybe they need to get in 
close to the grandchildren. They go to sell that farm. They discover 
that the capital gains taxes would be so high that they can't afford to 
sell the farm they worked a lifetime to pay for. They are not wealthy. 
But that is what we have done with the capital gains tax.
  I will give you one other example. My chief of staff is from Stone 
County, AR. Stone County has one of the largest per capita incomes in 
the State of Arkansas. His parents own a little cafe called Cody's Cafe 
in Fifty-Six, AR, next to the State park. It is a good restaurant. It 
has good food. I recommend it. I eat there when I am in Fifty-Six, AR. 
But Todd's parents wanted to sell that little restaurant. It is a mom-
and-pop operation. They don't have many employees. It is a very small 
cafe. They wanted to sell it and put it into another business, in 
another restaurant in another part of Arkansas. They had a buyer, 
somebody who was going to buy that cafe-restaurant. Those buyers 
undoubtedly were going to expand, and they were going to hire 
additional employees as well. Todd told his parents, ``Before you make 
that deal, before you sign that contract, be sure to check with your 
accountant. Find out what the capital gains taxes will be.''

  When they checked they found they couldn't afford to make that sale. 
So they hung onto it. They continued to operate it.
  But I want you to think with me, my colleagues. What would have been 
the impact had they been able to make that sale, had we not had the 
exorbitant capital gains tax we impose? We would have had a new 
business started with new employees. The economy would have been 
stimulated with more taxes being paid to the Federal Treasury. We would 
have had new business owners there in Stone County with the desire to 
expand that restaurant operation, hire additional employees and, 
therefore, not only stimulate the economy in Stone County, but pay more 
taxes to the Federal Treasury.
  You take that little example from Stone County, AR, and multiply that 
thousands of times across the United States, and you begin to get the 
picture of what we could do in stimulating the American economy, and 
therefore making it easier for us to balance the Federal budget if we 
would simply cut drastically and dramatically the capital gains tax 
rate. I believe we need to do that.
  So I know there are others who are here to speak. I just want to 
conclude by saying this is no time for us to retreat on our promise 
made to the American people that we are going to work for tax relief. I 
believe it is the moral equivalent of what President Bush did in 1990. 
I admire and love President Bush, but I think he made a terrible 
mistake when he told the American people ``no new taxes,'' and then 
violated that pledge in reaching a budget deal. We must not, in our 
desire to reach some mythical budget deal, forsake, abandon, or 
equivocate on the promise and the pledge we made to the American people 
that we have come up here to lessen that ever-increasing tax burden 
under which they labor.
  So I, for one, will continue to work for a budget that is going to 
have family tax relief, estate tax relief, and capital gains tax relief 
for the American people.
  I yield the floor, Mr. President.
  Mr. THOMAS. I want to ask the Senator if there is a Fifty-Six, AR.
  Mr. HUTCHINSON. There is a Fifty-Six, AR, and Cody Cafe is the place 
to eat.
  Mr. THOMAS. Mr. President, I yield to the Senator from Minnesota.
  The PRESIDING OFFICER. The Senator from Minnesota.

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