[Congressional Record Volume 143, Number 96 (Wednesday, July 9, 1997)]
[Extensions of Remarks]
[Page E1377]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       DEMOCRATS USE SKEWED FIGURES TO CHALLENGE TAX-CUT PROPOSAL

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                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                        Wednesday, July 9, 1997

  Mr. BEREUTER. Mr. Speaker, this Member highly commends to his 
colleagues the following editorial which appeared in the Omaha World 
Herald on June 20, 1997. This editorial is of particular interest 
because it notes the fraudulent basis for the argument used by 
Democrats opposing the Taxpayer Relief Act.

       Democrats Use Skewed Figures To Challenge Tax-Cut Proposal

       Democrats who don't like the House-approved tax-cut 
     proposal that is now before the Senate ought to challenge it 
     on its merits instead of putting out a fraudulent class-
     warfare argument.
       The Clinton administration and congressional Democrats who 
     oppose the Republican-sponsored plan argue that the proposed 
     net tax cut of $85 billion over five years ($135 billion in 
     cuts and $50 billion in tax increases) is targeted to favor 
     the rich. They rely on a report from President Clinton's 
     Treasury Department asserting that two-thirds of the benefits 
     would go to people in the nation's top 20 percent of earners.
       Treasury officials reached that conclusion by inflating the 
     definition of income like a toy balloon. It included things 
     such as ``imputed rental value.'' That means the sharp-pencil 
     pushers at Treasury have calculated how much a homeowner 
     could rent his home for and added that figure onto his 
     income. They also included the increased value of retirement 
     funds, pension contributions and employer-funded life and 
     health insurance.
       Those are not what most middle-class people would call 
     ``income.'' Such ridiculous additions skew the economic 
     profile of the middle-class taxpayer. But they enable 
     Treasury officials to ratchet millions of people up into 
     phony levels of wealth and then claim that the middle class 
     is being overlooked in the tax-cut package.
       The Joint Committee on Taxation sees it differently. Using 
     a definition of income more like that of the IRS, the 
     committee found that people earning from $20,000 to $75,000 a 
     year would receive 71 percent of the proposed tax savings in 
     the GOP plan. The percentage jumps to 88 if the range is 
     expanded to $100,000. Only 7 percent of the proposed tax cuts 
     would go to people earning more than $100,000 a year.
       Based on a reasonable definition of income, the Republican 
     tax-cut proposal is focused on the middle class. But 
     Democrats insist that the GOP is intent on stiffing the 
     middle class in order to take care of high rollers.
       In a battle of credibility on tax policy, the Joint 
     Committee on Taxation demolishes the Clinton administration's 
     Treasury Department. We are inclined to believe the committee 
     when it says 1) Treasury is unfairly inflating income figures 
     to push middle-class families into upper income levels, and 
     2) the majority of GOP-proposed tax relief is directed to the 
     middle class.

     

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