[Congressional Record Volume 143, Number 41 (Wednesday, April 9, 1997)]
[House]
[Pages H1388-H1389]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  EASING TAX BURDEN FOR ALL AMERICANS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida [Mr. Stearns] is recognized for 5 minutes.
  Mr. STEARNS. Mr. Speaker, I rise today to introduce legislation that 
would ease the tax burden for all Americans and assist all of us in 
pursuit of the American dream.
  This legislation contains three simple provisions affecting the Tax 
Code: Indexation of the capital gains tax, establishment of the 
American dream savings accounts, and repeal of the 1993 increase in 
taxes on Social Security benefits.
  Quite simply, this bill is designed to right several wrong things 
that I think presently exist in the Tax Code. And I would point out, 
Mr. Speaker, these three things are offset by reductions in the 
Department of Commerce and the Department of Energy. Surely the 
Department of Commerce would appreciate the fact that we are reducing 
taxes, and so would the Department of Energy. So the important thing 
about this bill is it is budget neutral.
  The legislation addresses capital gains taxation. This type of tax 
arises when an asset is sold and the difference between the base and 
the sales price is taxed. The appreciation in value can reflect real or 
perhaps it can reflect inflationary gain. Because of the uniqueness of 
this tax, what happens is, people hold an asset for a long period of 
time, they are taxed, and basically much of that tax is due to 
inflation.
  Put simply, gains should be indexed to account for this inflation, 
and that is what this bill does. I can give some statistics, which I 
will make part of the Record, Mr. Speaker, but basically, in real 
terms, fixing this simple capital gains indexation will increase 
investments by $75 billion, raise gross domestic product by $120 
billion, and reduce the cost of capital by 12 percent, creating an 
average of 233 additional new jobs.
  Best of all, a capital gains tax reduction affects nearly everyone in 
this country. In fact, nearly 50 percent of those Americans who claim 
capital gains have incomes of less than $40,000, and 60 percent of 
those who claim capital gains have incomes of less than $50,000.
  The second part of this legislation establishes dream savings 
accounts to encourage personal responsibility and, frankly, savings. In 
short, America needs a system that encourages and betters retirement 
and big-event purchasing savings and does so through these dream 
savings accounts.
  The current system does not provide any incentive at all for 
Americans to save for their first home or for their children's college 
education, nor does the current system afford American taxpayers the 
opportunity to use their retirement savings for catastrophic events. In 
fact, it can easily be argued that the current system penalizes 
Americans. We must change that.
  The third part of my bill would repeal the tax increases on the 
Social Security benefits that were enacted in President Clinton's 1993 
budget reconciliation bill. Prior to 1993, individuals with income in 
excess of a certain threshold could be taxed only at half of their 
Social Security benefits. Recipients with incomes below the threshold 
were not at all taxed on their Social Security income.
  However, after President Clinton's 1993 Omnibus Budget Reconciliation 
Act had been implemented, higher income thresholds were achieved. Now, 
individuals earning above these thresholds can be taxed at 85 percent 
of their Social Security benefits.

                              {time}  1645

  Unfortunately this bill also includes dividends on earnings. Thereby 
even tax-exempt dividends count as income when calculating Social 
Security taxation. Simply put, the tax increase in

[[Page H1389]]

the President's bill is unfair and wrong. It is punitive and hurtful 
toward our Nation's seniors and should be repealed. The last Congress 
sent to the President legislation to repeal the Social Security 
provisions, but the President stood by his original plan and it did not 
pass. Nevertheless, this issue is not resolved as far as I am 
concerned. We must address this issue, which is why I have introduced 
the language in this legislation to repeal the onerous 1993 tax 
increase on our seniors. This bill is very simple. It does these three 
things. It is common sense and fair. Simply altering a few necessary 
portions of our Tax Code, it would help all Americans and give a fair 
and level playing field. Best of all, every penny in reduced revenue is 
offset by reductions in the funds available to the Department of 
Commerce and the Department of Energy. This is a small but important 
step forward in the debate over our Nation's future. This is 
legislation we cannot afford to live without.
  Mr. Speaker, I urge my colleagues to support this bill. It is 
imperative for our country's present and future generations that we 
address these issues today.

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