[Congressional Record Volume 143, Number 95 (Tuesday, July 8, 1997)]
[House]
[Page H4892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             CAPITAL GAINS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida [Mr. Weldon] is recognized for 5 minutes.
  Mr. WELDON of Florida. Mr. Speaker, I rise tonight to talk about the 
issue of indexing capital gains for inflation. I was very disappointed 
to recently hear that the President of the United States, Bill Clinton, 
opposed this, and he felt that this would be some sort of a time bomb 
that would explode the deficit.
  I am very disappointed to hear him take this position because I 
believe very strongly that indexing capital gains for inflation is an 
issue of fairness. It is fairness to working people. It is fairness to 
the American taxpayer. And the best way to get this point across, Mr. 
Speaker, is to give an example.
  Let us just suppose that 10 years ago you saved up $1,000 and you 
decided to invest in something. Let us say you were investing for maybe 
your daughter's college education, she was 8 at the time, now she is 
18. And now today your thousand dollar investment was increased to 
$2,000. Well, you have got a $1,000 capital gain on that investment. 
And according to the kinds of tax policy that Bill Clinton would like, 
you would pay a capital gains tax on that $1,000. What we Republicans 
who support tax fairness say is that if inflation was such that that 
thousand dollars that you had 10 years ago is now only worth $500, then 
your real capital gains on that investment is $500.

                              {time}  1930

  It is not $1,000. And we should pay, Mr. Speaker, our 28 percent, or 
now, with our new capital gains reduction, it would be a 20-percent tax 
on the $500, and that is what we call indexing capital gains for 
inflation.
  Now, the President says this is a time bomb that is going to explode 
the deficit. I feel compelled to talk a little bit tonight about why we 
are in the fix that we are in right here in Washington where we have 
these huge deficits, and it is spending.
  It is not a problem with revenue. The American people have been 
sending more and more and more money to Washington, DC, and for years 
the deficits got bigger and bigger. It was not until the Republicans 
took control of this body that the deficits really started coming down.
  Mr. Speaker, the problem is spending. As a matter of fact, when 
Ronald Reagan cut taxes in 1980, revenues into the Federal Treasury 
went up more than $400 billion. But the reason the deficit exploded is 
because this body, the Congress of the United States, the House of 
Representatives, doubled spending over the next 8 years, and that is 
where those huge deficits came from. If the Congress had held the line 
on spending, we would not be in the fix we are in today and we would 
not have a $5 trillion national debt, $18,000 for every man, woman, and 
child.
  So when the President gets up and talks about this being a time bomb 
that is going to explode the deficit, what he is really saying to us is 
that he does not want to control himself, he does not want to control 
Washington when it comes to spending, and he wants to tax inflation. 
Our dollar is worth less, our investment is worth less because of 
inflation, but the President wants us to pay taxes on that.
  I say, Mr. Speaker, that what we in the Republican Party stand for is 
tax fairness. And, Mr. Speaker, indexing capital gains is just an issue 
of fairness. If we have made that investment but inflation has eaten 
away at the value of that investment, we should not have to pay income 
tax to Washington, DC, for inflation.
  Mr. Speaker, our tax bill is the right tax bill. It is a tax cut for 
the middle class, and it does provide badly needed capital gains 
reduction so that we can stimulate the economy and create good, high 
paying jobs well into the future. But what is very, very important, Mr. 
Speaker, is that we treat the wage earners all across America with 
fairness.
  This indexing of capital gains, in my opinion, is a fundamental issue 
of tax fairness. It will not explode the deficit if this body controls 
themselves on spending, if they hold the line on spending. If the 
Congress of the United States can live within its means, we will keep 
the budget balanced well into future years.
  The problem is not a deficiency of revenue for Washington, DC; the 
problem is, Mr. Speaker, too much spending.

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