[Congressional Record Volume 143, Number 105 (Wednesday, July 23, 1997)]
[Senate]
[Pages S7884-S7885]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 FAIR TAX RELIEF FOR WORKING AMERICANS

  Mr. KENNEDY. Mr. President, as the Clinton administration and the 
conferees on the tax cut bill work out their differences, we need to do 
all we can to guarantee that fair tax relief is delivered to the 
American people. The last thing Congress should do is enact a tax 
relief bill that offers plums to the wealthy and crumbs to everyone 
else.
  Who deserves the tax relief? Is it the average hard-working family on 
Main Street, or the wealthy millionaire on Wall Street? Is it the 
rookie policeman walking the beat? Or is it the heirs of fortunes worth 
millions of dollars? Is it the nurse trying to raise a family on 
$27,000 a year? Or is it the financier buying and selling stocks and 
bonds?
  That is what is at stake this week and next week, nothing less. There 
are two key questions: will Congress target the scarce funds available 
for tax cuts to working Americans in blue-collar shirts or to tycoons 
in designer suits? Will the amount of tax relief be responsible, or 
will it explode in the out-years and unbalance the budget we are trying 
so hard to balance?
  Everyone at the negotiating table now agrees that $85 billion is a 
realistic figure for tax relief over the next 5 years. The debate is no 
longer about how much tax relief we should enact for that period. Now 
the debate is over who should benefit from that tax relief, and how 
much they should benefit.
  Our Republican friends want to target the vast majority of the 
benefits of tax relief on those who have already benefited the most 
from the Nation's soaring economic growth--the wealthiest individuals 
and corporations in our society.
  Clearly, this tax bill cannot close the widening income gap in our 
society. But just as clearly, it should not make the gap wider.
  Over the last two decades, the rich have gotten richer, and everyone 
else has fallen behind. During the 1950's and 1960's, all income groups 
in the population participated in the economy's growth. We all advanced 
together. But, in the 1980's and 1990's, we grew apart. The benefits of 
economic growth have tilted heavily toward the rich.
  Instead of reducing this inequality, the Republicans would add to it. 
Their tax cuts are weighted heavily to the rich. According to the 
Treasury Department, the House Republican tax plan would give two 
thirds--two-thirds--of its benefits to the richest fifth of the 
population.
  And that estimate is conservative. Citizens for Tax Justice included 
the estate tax cuts and corporate tax cuts in their analysis and 
calculates that the richest fifth would get 80 percent of the benefits.

  By contrast, under the President's proposal 83 percent of the tax 
cuts would go to working families and the middle class, and only 10 
percent would go to the wealthy.
  The largest tax breaks in the Republican plan are the lower tax rate 
on capital gains, the indexing of capital gains for inflation, the 
estate tax cuts, and the expansion of IRAs and other tax-preferred 
savings accounts. All of these provisions benefit the wealthy, not 
average Americans.
  In addition, the Republican proposal opens the way for more tax 
loopholes and other special interest tax breaks. The changes to the 
corporate alternative minimum tax alone will make it easier for large 
corporations to earn billions of dollars in profits but pay little or 
no taxes.
  The most unbalanced giveaway in the Republican bill is the capital 
gains tax cut. Under the Republican bill the rich will see their 
capital gains tax rate cut in half. The lowest bracket taxpayers will 
only see a reduction of one-third.
  The Republican tax break on capital gains will be worth all of $6 to 
the average family with median income. But it will be worth over $7,000 
to those in the top 1 percent of the population.
  By contrast, under the President's proposal, everyone will get the 
same tax break of 30 percent on their capital gains. The President's 
proposal ensures that the same breaks granted to the rich are also 
given to every taxpayer. It is simple fairness that everyone should 
receive the same treatment.
  Another unbalanced provision in the Republican proposal is the estate 
tax reduction. The Republican provisions are aimed at the top 2 percent 
of all estates. They help those who have done extremely well in recent 
years. Median income taxpayers will see no tax reduction at all from 
these provisions.
  The Republicans claim that they are helping families with the $500 
children's tax credit. But most families earning under $30,000 will not 
be eligible to receive the full benefits of the credit under the 
Republican plan, and many of these hard-working, tax-paying Americans 
will receive no benefit from the credit at all. The President's 
proposal is far fairer in enabling these families to take advantage of 
the credit.
  Furthermore, no tax bill can be considered fair if it does not 
address the needs of low and moderate income families for affordable 
health insurance coverage for their children. Ninety percent of 
uninsured children are members of working families. These parents work 
hard--40 hours a week, 52 weeks a year--but all their hard work does 
not buy the insurance their children need for a healthy start in life.
  The Senate bill offered a downpayment on this problem by providing 
$24 billion to help such families purchase affordable coverage. This 
coverage was financed, in part, by a 20-cent-per-pack increase in the 
cigarette tax. Whether to include this cigarette tax increase, and the 
additional $8 billion in funding for child health insurance it will 
buy, in the final tax bill is now in dispute. In view of the immense 
costs that smoking inflicts on society and the critical need for 
children's health insurance for low and moderate income families, it 
would be a travesty if big tobacco prevails and eliminates these 
provisions from the final legislation.
  Finally, the Republican proposal has serious defects in the long run 
that make it irresponsible and that will cause the deficit to explode 
in future years. According to the Center for Budget and Policy 
Priorities, the Republican proposal will increase the deficit by $500 
billion to $600 billion in the 10 years after 2007.
  We went down this deficit road once before, with the excessive Reagan 
tax cuts of the 1980's. We should learn from that history, not repeat 
it. It is a pyrrhic victory if the budget is in balance in 2002, and 
then grossly unbalanced in the years that follow.
  Democrats are proud to stand for responsible tax relief that is fair 
to the American people. The Republican alternative flunks the test of 
fairness, and it flunks the test of responsibility. The choice is clear 
and the people will judge Congress by how we respond.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S7885]]

  The assistant legislative clerk proceeded to call the roll.
  Mr. GRAMM. 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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