[Congressional Record Volume 143, Number 95 (Tuesday, July 8, 1997)]
[Extensions of Remarks]
[Page E1365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1365]]



                HOUSE RIGHT TO GIVE MIDDLE CLASS A BREAK

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                           HON. NEWT GINGRICH

                               of georgia

                    in the house of representatives

                         Tuesday, July 8, 1997

  Mr. GINGRICH. Mr. Speaker, I would like to submit into the 
Congressional Record the following editorial, ``House Right to Give 
Middle Class a Break.'' Appearing in the Atlanta Journal on June 30, 
1997, this article cuts through all the misleading rhetoric surrounding 
the recently passed House tax-cutting bill. While providing the first 
major Federal tax cut to working Americans in 16 years, this bill will 
bestow a full three-quarters of its benefits upon middle income 
Americans with incomes under $75,000 per year.
  I would like to clear up two misconceptions about this bill. First of 
all, some of my friends on the left have attacked this bill because we 
chose to give tax relief to taxpayers, rather than channel the money 
into additional welfare spending. The fact of the matter is that the 
poorest working Americans do not pay Federal income tax, and the 
payroll taxes that are withheld from their paychecks are more than 
fully refunded through the earned income tax credit. To give an 
additional $500-per-child tax credit to those who pay no taxes is 
welfare, plain and simple. Now if my redistributionist friends on the 
left favor higher welfare spending, they are welcome to make that 
argument on its own merits, but they should not disguise additional 
welfare payments as a tax credit.
  The second false argument made by critics of the bill is that it is a 
tax giveaway to the rich. First of all, my Republican colleagues and I, 
start from the premise that tax dollars belong first and foremost to 
those who earned it, not the Government. Thus, the term ``tax 
giveaway'' can only be accurately used to describe the redistribution 
of wealth, whereby the Government confiscates money from the one who 
earned it to give it to someone who did not earn it. Furthermore, in 
analyzing who benefits from this tax bill, the Treasury Department 
cooked the books to make practically any taxpaying jobholder rich. For 
example, in calculating income, the Treasury Department factored in the 
potential revenue which could be generated by renting out one's house. 
No rational American considers him or herself wealthier by such a 
hypothetical source of additional income.
  I join the Atlanta Journal in celebrating this long-overdue tax 
relief for hard-working Americans.

               [From the Atlanta Journal, June 30, 1997]

           Opinion: House Right To Give Middle Class a Break

       The House has passed a budget bill that would eliminate 
     deficits by 2002, offer college scholarships to thousands of 
     students and, for the first time in 16 years, give a 
     significant tax break to an overburdened middle class.
       And though it does all those remarkable things--helped by a 
     hard-charging economy--the bill garnered support from just 27 
     Democrats. The Senate on Friday passed a similar budget bill, 
     but with considerably more bipartisan support.
       The 179 Democrats who voted against the House bill 
     complained that it tilted too heavily in favor of the 
     ``rich'' (read: the middle class) and did too little to help 
     the ``poor'' (read: those who pay little or no taxes).
       ``They [Republicans] give tax breaks to people who don't 
     need them,'' charged Rep. Edward Markey (D-Mass).
       We think the middle class needs them, and thus we're glad 
     that families earning $75,000 a year or less would get 76 
     percent of this bill's benefits. The main ones are:
       $3,000 in tax breaks for the first two years of college, or 
     $10,000 per year in tax deductions for tuition. The 
     provision, a pet project of President Clinton, consumes about 
     $30 billion of the overall $85 billion in tax cuts.
       An increase in the amount of income exempted from 
     inheritance taxes from $600,000 to $1 million. While 
     Democrats charge this provision helps the rich, mostly it 
     benefits small-business owners who risk losing a family 
     business to an onerous tax liability after the death of a 
     relative.
       A cut in the capital gains tax to 20 percent from 26 
     percent, and adjusting capital gains to the effects of 
     inflation. This benefits not just the wealthy, but a middle 
     class increasingly invested in 401(k)s and mutual funds, as 
     well as average home sellers whose ``gains'' are largely the 
     result of inflation.
       A tax credit of $500 per child 17 or younger for families 
     earning less than $110,000. The credit, benefiting millions 
     of families, would be $400 next year, rising to $500 
     thereafter.
       House Democrats complain not just about the capital gains 
     tax cut--which benefits all Americans by sparking capital 
     investment and job creation--but also that Republicans 
     refused to extend the child care tax credit to the working 
     poor. Democrats wanted the $500-per-child credit to go to 
     those who don't even have $500 in tax liability, giving the 
     working poor, on top of the Earned Income Tax Credit, one 
     more ``refund'' on taxes they didn't pay. But that's not a 
     tax cut; it's another scheme to seize income from one 
     American and put it in the pocket of another.
       To the extent the working poor pay taxes, prepare their 
     kids for college and try to save for the future, this bill is 
     a boon to them. But in the end, tax cuts should go to people 
     who actually pay taxes.

     

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