[Congressional Record Volume 143, Number 95 (Tuesday, July 8, 1997)]
[Extensions of Remarks]
[Page E1372]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      TAXPAYER RELIEF ACT OF 1997

                                 ______
                                 

                               speech of

                           HON. PATSY T. MINK

                               of hawaii

                    in the house of representatives

                        Thursday, June 26, 1997

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 2014) to 
     provide for reconciliation pursuant to subsections (b)(2) and 
     (d) of section 105 of the concurrent resolution on the budget 
     for fiscal year 1998:

  Ms. MINK of Hawaii. Mr. Chairman, I rise to oppose H.R. 2014, the 
Republican tax bill, which shifts the burden of achieving a balanced 
budget by 2002 to those least able to pay.
  Mr. Chairman, H.R. 2014 directs 70 percent of the tax cuts to the top 
20 percent of the Nation's taxpayers. H.R. 2014 further limits the new 
$500-per-child tax credit so that the working poor would not be 
eligible. H.R. 2014 also allows investors to reduce the taxable value 
of their capital assets by the rate of inflation, beginning in 2001. 
H.R. 2014 disproportionately benefits the very wealthy since 62 percent 
of all capital gains are realized by people with incomes of $200,000.
  With respect to education, H.R. 2014 provides $31 billion in tax cuts 
to pay for higher education costs over the first 5 years, although the 
GOP congressional leadership and the White House had agreed earlier on 
a $35 billion cut. In addition to reducing the allocation for education 
tax cuts, H.R. 2014 changes how these tax cuts would be applied.
  For example, under H.R. 2014, a tuition tax credit replaces the HOPE 
tax credit. The new tuition credit provides for 50 percent of the first 
$3,000 of tuition paid, and not a full tuition credit of up to $1,500. 
Accordingly, those students who attend community colleges and other 
low-tuition schools where costs total, say, $2,000 will receive only 
$1,000--that is, 50 percent of $2,000--and not the full credit of up to 
$1,500 proposed by President Clinton. And, by applying the Pell grant 
offset to the new tuition tax credit, H.R. 2014 further reduces the 
credit that will be available to low-income students attending low-
tuition community colleges.
  H.R. 2014 provides for education saving accounts as a way to minimize 
taxes. But these accounts are also skewed against low-income families. 
Why? Because the tax education is taken when tuition is paid rather 
when deposits are made to the accounts. Only high-income families will 
be able to save enough to take advantage of this tax deduction.
  H.R. 2014 provides for a child tax credit which will, however, be 
effectively denied to lower-income working families who have the 
greatest need for it. While H.R. 2014 phases out the child tax credit 
at $75,000--single returns--and $110,00--joint returns--the tax bill 
provides that any earned income tax credit received by lower-income 
working families will be used to offset the child tax credit, thereby 
ensuring that the child tax credit will be denied to lower-income 
working families.
  Single parents who need child care, and use the dependent care tax 
credit will also be effectively denied the new child tax credit. Why? 
Because the tax bill provides that any dependent care tax credit 
claimed by single parents will be used to offset the new child tax 
credit.
  The capital gains provisions in H.R. 2014 disproportionately benefits 
the richest Americans. Aside from the fact that 62 percent of capital 
gains are realized by people with incomes over $200,000, investors will 
be able to index their capital gains for inflation--that is, reduce the 
taxable value of their capital assets by the rate of inflation--
beginning in 2001. The longer an asset is held, the greater the 
inflation indexing will be. This will result in very large tax cuts for 
the very rich.
  In addition, the indexing of captial gains for inflation, beginning 
in 2001, means that the projected $3 billion in capital gains-related 
revenue gains of the first 5 years will be offset by huge revenue 
losses in the second 5 years. Indeed, the capital gains provisions of 
the tax bill are expected to contribute about $33 billion to the 
deficit over 10 years.
  H.R. 2014 is fundamentally unfair. This bill, like last year's 
egregious welfare legislation, punishes the most vulnerable of our 
citizens: the working poor. The tax bill offers the working poor no 
relief, and ensures that the gap between the working poor and the rich 
will widen even more.
  I strongly urge my colleagues to oppose H.R. 2014.

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