[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Senate]
[Pages S2805-S2807]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  THE SINKING OF THE ``TITANIC'', TAX DAY, AND OTHER MANMADE DISASTERS

  Mr. GRAMS. Mr. President, 1 week from today, we will mark the 
anniversary of two infamous, manmade disasters. One may slip by 
unnoticed. I am certain the other will not.
  The first disaster we will commemorate next Tuesday is the 85th 
anniversary of the sinking of the Titanic, an event made all the more 
tragic because it could have been prevented. The story of the Titanic 
is a sad story of excess, of man's ongoing reach for something bigger, 
something more powerful.
  The second manmade disaster is the arrival of tax day. Now, I do not 
mean to draw a direct comparison between the loss of life in the 
Titanic incident and the plight of America's working men and women. But 
for many Americans, April 15 is another potent symbol of man's ongoing 
reach for something bigger and more powerful. The bigger and more 
powerful entity in this case is not the world's largest ship, but the 
largest government the world has ever known. And Washington's constant 
need to expand its reach has imprisoned working families in a 
disastrous cycle of taxation.
  Look what our outrageous tax burden has done to families over the 
past 40 years. Taxes today dominate the family budget. The annual tax 
bill for a typical family now averages $21,365-- significantly more 
than they spend on food, clothing, and shelter every year.
  Factor in State and local taxes and the hidden taxes that result from 
the high cost of government regulations, and a family today gives up 
more than 50 percent of its annual income to the government. We pay an 
especially high price in my home State of Minnesota--a study released 
last year by Harvard University revealed that Minnesota taxpayers pay 
the seventh highest taxes in the Nation.
  Taxes are not merely an inconvenient fact of life. They are the 
1990's version of highway robbery.
  Who has borne the brunt of these ever-increasing taxes since the 
1940's? Working families with children. No wonder these Americans shake 
their heads in dismay each April.
  Mr. President, when my colleagues and I in the sophomore class were 
elected in 1994, we were sent here by our constituents on a promise 
that we would balance the budget and cut taxes. That same promise was 
made by the Members of the new freshman class. And we do not intend to 
let 1 more year pass without delivering on those promises. Tax relief 
and deficit reduction can and must go hand in hand. Any budget 
presented in this Chamber that favors deficit reduction at the expense 
of lower taxes--what Washington's big spenders like to call the save-
the-dessert-for-after-dinner approach--is nothing more than an exercise 
in futility. Until the opponents of tax relief recognize that what they 
call dessert is what most taxpayers consider their salary, we will 
never reach agreement on a budget.

  I would like to also add that I received a letter today from a mayor 
back home who opposed tax relief. He didn't call it dessert, but he 
called it political goodies that we would like to disperse to our 
constituents. Allowing working men and women to keep more of their 
money is what he calls political goodies.

[[Page S2806]]

  This is the mindset of many who are serving in government today, 
whether they be local, State, or Federal officials. Somehow the 
people's money is somehow government's claim, and if we want to make 
sure that they can keep some of it, it is somehow political goodies.
  But it was later in his letter that I found what was really his real 
concern. In the letter I think he felt that lower taxes could mean 
fewer dollars to be sent from Washington to his town. So his concern 
wasn't the political goodies, but it could mean fewer dollars if we 
reduce the size and scope of the Federal Government. That is money that 
would be allowed to be spent, or really the pork from Washington--not 
political goodies but pork. Let the Federal Government raise the taxes 
rather than having the local taxes support the programs for pork that 
they want. So, in other words, provide for their residents. It is 
really great that we can stand here and get credit for spending their 
money--the taxpayers' money--for programs, for what really is pork that 
the Government thinks that they should have, or that they need. It is 
great that we have this great ability to figure out for the local 
citizens what is best for them.
  The American people have spoken very clearly on this point. A USA 
Today-CNN-Gallup Poll released just last week confirms what many of us 
have been saying all along: Tax cuts must be part of any budget 
agreement we enact this year. When asked if they think the Republicans 
should drop their attempts to include tax cuts in their overall plan to 
reduce the budget deficit, or should they keep the tax cuts in their 
plan, fully 70 percent of the respondents said the tax cuts should 
stay. Seven out of ten Americans are calling on us to keep our tax-
cutting pledge. And a majority agreed that tax cuts and deficit 
reduction can be accomplished at the same time.
  Mr. President, if Congress intends to make the strongest possible 
statement in support of working Americans, we will not do it by 
building a bigger Federal Government that demands more taxpayer 
dollars. We will do it by cutting taxes and leaving families a little 
more of their own money at the end of the day.
  Earlier this year, I was proud to join my colleagues, Senator 
Hutchinson and Senator Coats, in reintroducing this desperately needed 
tax relief in the form of the $500 per-child tax credit.
  The $500-per-child tax credit takes power away from Washington and 
puts it back with families, where it can do the most good. Once we 
leave that money in the family bank account, taxpayers are empowered to 
use it meeting the needs of their families, whether that is clothing, 
medical and dental expenses, insurance, or even groceries, or 
education.
  Mr. President, there is no action Congress can take today that will 
make next Tuesday, April 15, any easier for America's working families. 
But we have before us unlimited opportunities to profoundly change 
every other tax day, far into the future. Washington created the mess 
we are in, and the taxpayers are now demanding that Washington get us 
out of it. Thank you very much. I yield the floor.

  Mr. THOMAS. Mr. President, I yield to the Senator from Arizona.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Thank you, Mr. President. I thank my colleague from Wyoming 
for putting this order together at this propitious time to discuss tax 
policy in the country with April 15 looming on the horizon and 
Americans all over the country concerned about the amount of money we 
pay to the Federal Government in Federal income taxes.
  Mr. President, I have an important announcement to make. I have been 
authorized to announce that on tax day, April 15, the U.S. Senate will 
have a historic opportunity to vote on a resolution which will express 
the sense of the Senate that we support a requirement that Congress, 
the House and the Senate, be required to raise taxes with a 
supermajority. In other words, that we could not raise taxes with a 
bare majority, that it would require a two-thirds vote for a tax 
increase to go in effect, much like the requirement in States 
throughout the United States, and a very successful requirement, I 
might add. The full House is actually going to vote on tax day on the 
actual constitutional amendment. Our resolution will be a sense of the 
Senate in support of that same concept. Obviously, we are not prepared 
yet to actually vote on the constitutional amendment.
  The reason for this, Mr. President, is that the average family of 
four back in 1948 paid about 5 percent of its income in Federal taxes. 
But today that burden is about 24 percent. And, as our colleague from 
Minnesota just noted, if you add the State and local taxes to the mix, 
we are paying about 40 percent of our income in taxes to government.
  The last tax increase to pass in the Congress in 1993 was the largest 
in history. And, yet, it failed to even achieve a majority in the U.S. 
Senate. There was a tie of 50-50. President Clinton's largest tax 
increase in history only passed because Vice President Gore came to the 
Chamber and cast the deciding vote. We believe that it ought to be at 
least as difficult to raise taxes as it is to cut them. It is now 
easier, sadly, to raise taxes than it is to cut them.
  Consider this irony. This two-thirds majority would fix this problem, 
by the way. When we passed the balanced budget amendment of 1995, the 
President vetoed it. It included big tax cuts. The President vetoed it. 
We had to have a two-thirds majority to overcome the veto, and we 
couldn't do that. So it would have required a two-thirds vote for us to 
reduce taxes. But, as I pointed out, the biggest tax increase in the 
history of the country in 1993 passed without even a majority vote.
  As I said, Mr. President, we think it ought to be at least as hard to 
raise taxes as it is to cut them. That is why we are going to be voting 
on April 15 to support the principle that there should be a 
supermajority for Congress to raise taxes.
  The Kemp commission, appointed by the Speaker of the House and the 
previous majority leader of the Senate, came to this conclusion about 
this requirement. I am quoting: ``The commission believes that a two-
thirds supermajority vote of Congress will earn Americans' confidence 
in the longevity, predictability, and stability of any new tax 
system.''
  They made that point in recommending this two-thirds supermajority of 
both Houses of Congress to raise taxes as a key component of our tax 
policy. As I said, there are 14 States that currently have some form of 
tax limitation in effect. There was an interesting study in 1994 by the 
Cato Institute which found that a family of four in States with tax and 
expenditure limits faces estate and tax burdens that are $650 lower on 
average 5 years after the implementation than it would have been if the 
State tax growth had not been slowed. In other words, the people who 
live in States that have these supermajority requirements are better 
off, pay less in taxes than those States which do not have such a 
requirement.

  It also matters, Mr. President, how we raise or lower taxes. Or I 
should say, put it another way, how we increase revenues to the 
Treasury matters because you can increase revenue to the Treasury not 
by raising tax rates but actually by lowering certain tax rates.
  We all agree that lower tax rates stimulate the economy, which 
results in more taxable income and transactions and more revenue to the 
Treasury as a result. In fact, the tax cuts out of the early 1980's 
make this point. They spawned the longest peacetime economic expansion 
in our Nation's history.
  Revenues to the Treasury, the Federal Treasury, increased as a result 
from $599 billion in fiscal year 1981 to $990 billion in fiscal year 
1989, up about 65 percent.
  On the other hand, higher tax rates discourage work and production 
and savings and investment so there is ultimately less economic 
activity to tax. That is exactly what Martin Feldstein, the former 
Chairman of the President's Council on 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, and the economy eventually paid the price in terms 
of slower growth.

[[Page S2807]]

  In other words, as I said, how Congress raises taxes is more 
important than how much it can tax. The key is whether tax policy 
fosters economic growth and opportunity. And that is why we believe, as 
I said before, that it ought to be more difficult to raise tax rates. 
It ought to be just as easy to cut taxes. We should raise tax rates 
only if there is enough consensus on that to provide a two-thirds 
majority of both Houses of Congress.
  So on April 15, tax day, all of us in the Senate will have the 
opportunity to go on record to tell our constituents where we stand. Do 
we believe that it ought to be just as difficult to raise taxes as it 
is to cut them? We will have the opportunity to vote on the principle 
of requiring a supermajority in Congress to raise taxes. And I 
certainly hope that my colleagues will support us in that vote.
  I thank the Senator from Wyoming for this time.
  Mr. THOMAS. Mr. President, I am pleased now to yield to my friend, 
the Senator from Oklahoma, who has actually been chairman of our 1994 
group. The Senator from Oklahoma.
  Mr. INHOFE. I thank the Senator from Wyoming for having this time 
devoted to such a significant issue.
  Mr. President, I ask unanimous consent that the time which has been 
allotted to Senator Thomas be extended until the hour of 11:15.
  The PRESIDING OFFICER (Mr. Smith of Oregon). Without objection, it is 
so ordered.
  Mr. INHOFE. I think something that is very significant that has not 
yet been said was touched upon by the distinguished Senator from 
Arizona [Mr. Kyl], when he approached the economics of this issue. 
Unfortunately, when we talk about tax reductions, there is a mindset 
that if you reduce taxes, you reduce revenues. History has shown us 
very clearly that is not the case.
  In fact, it was a Democrat who first came up with the idea that you 
could actually increase revenues by reducing taxes, and that was 
President Kennedy back in the early 1970's when he said we have a 
problem in this country; we have to increase revenues, but we also are 
overtaxed, so the best way to increase revenues is to reduce the tax 
rates.
  Now, today, the Democrats do not think that way. The liberals in 
Congress think that it is a static situation, and that if you raise 
taxes nothing else happens.
  That, of course, is not true. I remind my colleagues that in 1980, 
the total amount of money used to run Government was $570 billion, the 
total revenue that came in in 1980. In 1990, the total revenue that 
came in to run Government was $1 trillion 30 billion. That is almost 
exactly double what it was in 1980.
  Well, what happened during that decade? During that decade, we had 
the largest tax reductions we have ever had in this country's history. 
So the same thing that happened back during the Kennedy administration 
when he had the wisdom to say we have to increase revenues and the best 
way to do this is to reduce taxes happened again in the 1980's. 
Unfortunately, we have an administration in the White House that does 
not understand this.

  In fact, I was amazed early in this administration when Laura Tyson, 
who is the chief economic adviser to the President of the United 
States, President Clinton, back in 1992 said--and this is nearly a 
direct quote--there is no relationship between the level of taxes a 
nation pays and the amount of economic productivity of that nation.
  That is saying they believe if you tax everybody 100 percent, they 
are going to work as hard as if you taxed them 10 percent. This is what 
Senator Kyl was getting to, that there is a relationship between the 
level of taxation and the productivity of a nation. In fact, to be 
specific, for each 1-percent increase in economic activity of a country 
it increases new revenue $24 billion.
  So those of us who are conservative, those of us who believe that 
what history has taught us is very factual are standing here saying we 
want to lower taxes, we want to do as Senator Kyl suggested and make it 
more difficult for people to raise taxes. I suggest, if you go back and 
look at the votes that took place to raise taxes, at least in the 10 
years I have been here, it has always passed by maybe 1 or 2 percent. 
If you put a supermajority on that, I believe we can accomplish a lot.
  And so as the speakers before me have indicated, there are a lot of 
advantages here to get this machine working and to become more 
productive, and if for no other reason than the distinguished Senator 
from Minnesota said--we who are elected to the Senate, that is, those 
of us in the Chamber right now, in 1994 committed and promised that we 
would vote for a balanced budget and reduce taxes, and we are going to 
do that.
  I yield the floor.
  Mr. THOMAS. Mr. President, let me just sort of wind up on our tax 
thing and say that if you are like me--a weekend from now it will be 
April 15 and all of us I hope are beginning to think about preparing 
our tax returns. It is a headache, of course, and so we tend to 
procrastinate. We are taxed too high, I am sure. And I am sure also 
that people out there look at Washington and wonder if all that talk 
about tax relief is just talk.
  We are here to say that it is not. Tax relief for families in 
America, for small business, is alive and well and one of the good 
ideas that is coming out of Washington, I hope soon. By next year, it 
is our hope that as we begin to think about compiling tax returns we 
will have accomplished what Americans deserve and expect from 
Washington as a matter of fact--reforms that let families keep more of 
their money. Republicans want to lower the tax burden and provide some 
common sense to the tax system.
  Currently, according to the Census Bureau, a typical family of four 
spends more than 3 hours of every 8-hour day working for dollars that 
are dedicated to Federal, State and local taxes. That is an average of 
almost 40 percent of income--40 percent of our income to continue to 
grow a central government. You get big government and you get a bloated 
bureaucracy. Instead, we ought to be able to use those dollars to 
increase our businesses, to feed our kids, to send them to school. So 
we need reform, smart reform, smart tax reform. That has a nice ring to 
it, doesn't it?
  I hear also in town meetings more and more about the IRS. Let me tell 
you that at least to some extent you cannot do much about the IRS until 
you change the system and make it simpler. Which taxes to reform? Where 
should we start? The inheritance tax for one. We have already talked 
about that. Here is one that makes no sense at all. We spend more time 
avoiding inheritance taxes than we do paying them. People who have 
spent time in business and farms cannot pass it on to their own 
families. The current tax penalizes the development of wealth and 
business. That is wrong. It is really a matter of freedom. Citizens own 
their property and families should not be compelled to sell it if the 
head of the household passes away. In the West it is an environmental 
problem. The view of the West, the mountains will be subdivided unless 
we act.

  How about capital gains reduction? Entrepreneurs and small business 
investors take substantial risks when they open or invest in 
businesses. Cutting capital gains will increase economic growth. Add to 
that tax credits for our families with children. Grant a $500-per-child 
tax credit and give families the opportunity to do some things.
  When it is all wrapped up, tax reform should have to pass a simple 
commonsense test. Does it impose the lowest possible compliance and 
enforcement? Does it encourage growth? Does it work to help strengthen 
families? By anyone's measure, our current system does not pass this 
test. So we deserve a Saturday in April with our family instead of 
sitting with a stack of receipts and the Tax Code. We want tax 
simplicity. We want tax relief.
  The President's proposed budget, according to the Joint Committee on 
Taxation, the President's fiscal year 1998 budget contains a net tax 
increase of $23 billion over 10 years. That is not tax relief. That is 
more burden. That is not what we need in the future. The President 
needs to come to the snubbing post and join with us on taxes and reform 
in balancing the budget. We can do that, and our opportunity is now.
  Mr. President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I would like to yield myself time that is 
allocated to the minority leader.
  The PRESIDING OFFICER. The Senator is recognized for 15 minutes.
  
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