[Congressional Record Volume 143, Number 86 (Thursday, June 19, 1997)]
[Senate]
[Pages S5962-S5963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE TAX BILL

  Mr. DORGAN. Mr. President, Senator Durbin and I want to visit a bit 
with our colleagues about the tax bill that is now being written in the 
Senate Finance Committee, and the tax cut bill that was written by the 
House Ways and Means Committee--to talk about who will receive the 
benefits of this legislation.
  I served for 10 years on the House Ways and Means Committee, and was 
involved in the writing of tax legislation. And I understand that, 
generally speaking, when tax legislation is written you have a lot of 
very important interests who come to the table and want to have access 
to some of the benefits of the tax cuts. My concern is that when 
Congress decides to provide tax cuts that it provide tax cuts 
especially to working families in this country who have seen an 
increase in their payroll taxes.
  One of the circumstances that exists now in this country is that 
nearly two-thirds of the American people pay higher payroll taxes than 
they pay in income taxes. Yet, every time we talk about tax cuts around 
here we have folks who talk about the tax cuts that will generally say 
if you invest you are going to be exempt but if you work you are going 
to be taxed. In other words, they go right back to the old approach: 
Let's tax work and exempt investment. I happen to think investment is a 
worthy thing. We ought to encourage more of it in this country for 
those who work. Why can't we construct a tax bill that will value work 
as much as we value investment?
  It is interesting to me that the bill that was constructed by the 
House of Representatives is a proposed tax cut bill which says here is 
the way we are going to deal out our tax cuts. We are going to provide 
for the bottom 60 percent of the people in this country that--if you 
have a table and the American people are sitting around that table--the 
bottom 60 percent of income earners are going to get 12 percent of the 
tax cuts. Then we say for the top 10 percent of the income earners 
around this table that you are going to get 43 percent of the tax cut.
  Let me put it a different way. It says for the bottom 20 percent of 
the working population in this country you are going to get one-half of 
1 percent of the total tax cut given by Congress. The bottom 20 percent 
gets one-half of 1 percent, and the top 1 percent gets nearly 20 
percent of the benefit of the tax cut.
  You can construct a tax cut that is much more fair than that.
  The tax increases that people have experienced in this country in 
recent years has been the payroll tax. The folks who go to work--
especially at the lower wages and then find their wages are largely 
frozen. It is hard to get out of those brackets. But the one thing that 
isn't frozen is the payroll tax, and they have to pay higher and higher 
payroll taxes.
  What happens to them is--despite the fact they have not had increases 
in income but they have had increases in payroll taxes--when it comes 
time to figure out how Congress is going to give back some taxes and 
provide tax relief, they discover that the tax relief isn't really 
available to them. It is going to be available to the folks at the top. 
Those are the folks that have had the biggest income increase--the 
highest increase in income--in recent years. Frankly, they do not pay 
anywhere near the kind of payroll taxes because their payroll taxes end 
at a certain level. The folks at the bottom pay a payroll tax on every 
dollar of income. Those are the taxes that increase.

  But here are some of the concerns that we have about the tax bill. 
Senator Durbin and I hope that when the legislation is finished by the 
Senate Finance Committee that it will come to the floor with a 
distribution table that is fair for the middle- and lower-income 
working families so they can get some real tax relief.
  But the child tax credit, which I think makes some sense, is not 
refundable. Therefore, the folks who do not make enough money but are 
still working and paying payroll taxes--incidentally paying higher 
payroll taxes--are not going to get the full benefit of the child tax 
credit.
  This chart shows that the child tax credit is not going to be 
available to 40 percent of American children. There was an adjustment 
in the last day that will decrease that to about 30 percent. That does 
not make any sense.
  Make that available so that the working people can get a child tax 
credit. Make that available to them, and that can be helpful to them 
with real tax relief.
  This is the distribution of the House tax bill proposal. It is the 
same old thing. There is no secret here. If you are fortunate enough to 
be in the top 1 percent of the income earners, you are going to get a 
whopping $12,000 tax cut. And if you are down at the bottom 15 percent, 
or so, of the income earners, you are going to get a $14 tax cut.
  It is the old cake and crumbs theory. If you are somewhere up near 
the top, you get the cake. If you are earning somewhere down near the 
bottom, you get the crumbs.
  Yet those who face higher taxes in this country are the ones who are 
paying the payroll taxes. That especially hurts those at the bottom of 
the income level.
  We hope that when the Congress, and the Senate Finance Committee in 
this case, brings a bill to the floor of the Senate that we will see a 
distribution table that allows us to say everybody in this country 
benefits from a tax cut.
  There is kind of a different theory in this country. Some feel this 
economy works because you pour something in the top and it trickles 
down to everybody at the bottom. Others of us think that it works 
because you have a lot of working families, and, if you give them 
something to work with, it percolates up, and that represents the 
economic strength and economic engine of this country.
  But when we give tax cuts as a Congress, let us do it fairly. Let us 
make sure that moderate-income and low-income families out there in the 
middle of the pack also get a reasonable tax cut, and not just the 
folks way at the upper end who get exemptions for their investments, 
but the rest of the folks as well. If we get to that point, I think the 
American people will say a job well done.
  Mr. DURBIN. Mr. President, will the Senator yield?
  Mr. DORGAN. Yes.
  Mr. DURBIN. Mr. President, I am pleased to join Senator Dorgan on 
this issue. There is not a more important

[[Page S5963]]

topic on Capitol Hill. During the last several weeks we were 
embarrassed by a debate on the disaster bill. I am afraid that we are 
going to be embarrassed again by a tax bill that will be disastrous to 
working families. Senator Dorgan pointed it out.
  Why in the world would we be giving tax cuts to the wealthiest 
Americans, and ignoring folks struggling to get by every day; trying to 
pay the bills, trying to pay for their day care costs, trying to save a 
little money for their children, trying to make sure they make the 
mortgage payment and maybe have enough left over for the utility bills? 
Why isn't this tax bill helping these families?
  Folks making $100,000, $200,000, or $300,000 are the winners in this 
tax bill. But the folks struggling to get by? The husband and wife both 
working two jobs are the ones who don't get a break. Why are we doing 
this? Because there is a clear difference in values between the people 
who are arguing this bill.
  For goodness sakes. I believe, as Senator Dorgan has said, that we 
should be helping working families at this point in our history. Give 
those folks a break, and make sure that the families which are being 
nailed with payroll taxes get a chance to make a living and realize the 
American dream. And give their kids a chance. But to say that we are 
going to focus the help in this bill on those who are struggling--get 
this now, struggling-- with the concept of, ``How will I pay my capital 
gains on the stock that has appreciated so dramatically?'' Are those 
the folks that you would loose sleep at night over and the ones that we 
should have some sort of tinge of sadness in our heart for? I don't see 
it.

  When I think of this tax bill I think of working families trying to 
hang on to a job, and struggling to get by.
  Take a look at what this does. This really tells the story, 
unfortunately, about what this is all about. Think about this. The 
lower 60 percent of wage earners in America--the lower 60 percent--
under the bill being proposed by the Senate Republicans get 12 percent 
of the tax cuts; 12 percent. More than 87 percent goes to those in the 
upper-income categories.
  The amount of money involved in this is dramatic. If you make over 
$400,000 a year, we are going to give you a $7,000 tax cut. We want to 
take care of you. We are afraid you are struggling at $400,000 a year. 
But if you happen to be making $50,000 a year, I am afraid to tell you 
that the benefit is going to be about 52 bucks; a buck a week.
  What a heart this Senate has for working families.
  Let's hope that the people who are writing this bill wake up to the 
reality that we have to do more than just meet the target of cutting 
$130 million when it comes to tax cuts. We have to be cutting it in the 
right way so that working families have a fighting chance.
  Let's make sure that when this debate is over that we don't have 
another disaster bill--a bill disastrous for working families.
  The final point I want to make on this is when you take a look at 
these tax cuts, don't measure them against just this year, or next 
year, or even 5 years, but against what they will do down the line.
  The people bringing this bill are very crafty. They start the tax 
cuts now. They don't look like much. And, all of a sudden, they start 
mushrooming--it may be a poison mushroom--when you look at the 
outyears. We have a dramatically costly bill associated with these tax 
cuts.
  So in the future Members of Congress--the House and the Senate--are 
going to struggle to balance the budget because of bad decisions and 
bad policy today. That makes no sense.
  I urge my colleagues on the Senate Finance Committee and all of my 
colleagues in the Senate to think about the working families in this 
country for a change. For goodness sakes, let's have a tax cut bill 
that is designed to help them. These are families who, with a tax cut, 
will turn around and make purchases--who will purchase a new washer and 
dryer, who will purchase a new home, who will purchase a new car--
creating jobs and creating opportunities.
  That is what this is all about.
  I thank my colleague, Senator Dorgan, for requesting the floor at 
this propitious moment in the debate on this bill. I hope that our 
message will be delivered through the people of this country, and to 
all of our colleagues.
  Mr. DORGAN. Mr. President, I yield back the remainder of our time and 
make a point of order a quorum is not present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SHELBY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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